Why Some States Require Medicaid Guarantees for Children

Before the start of the Covid-19 public health emergency in 2020, millions of children moved in and out of Medicaid each year, an indication that many lost coverage because of administrative problems, and not because their families earned more and were no longer eligible.

Now, several western states like California are looking to change this situation with new continuous enrollment policies for the youngest Medicaid members. These rules, which have been in place for decades, are likely to change as states assess changes caused by the pandemic.

California lawmakers approved a proposal — pending federal approval — to require Medicaid-eligible children to be enrolled at birth and remain enrolled until age 5 starting in 2025.

Oregon has already passed a similar policy. In 2023, when the public health emergency is expected to end, Oregon will allow Medicaid-eligible children to enroll at birth and remain in the program until their 6th birthday, without changing family income and reapplying.

“This is a clear step forward in supporting children,” said Jennifer Wagley, executive director of Our Children Oregon. According to Wagley, keeping children covered — especially early in their development — will ensure they don’t miss important checkups and care because of gaps in coverage.

In July, Washington state asked the Biden administration for permission to continue coverage for children as young as 6, with a decision expected in the coming weeks. For its part, New Mexico has requested public comment on its plan to enroll children until age 6 and is expected to seek federal approval later this year.

Medicaid enrollment reached record levels after the federal government barred states from enrolling members during public health emergencies unless they died or moved out of state. This rule has contributed to the nation’s uninsured rate reaching an all-time low.

About 41 million of the nearly 90 million people who receive Medicaid and the Children’s Health Insurance Program (CHIP) are children. CHIP is a federal-state program that covers children from high-income families eligible for Medicaid.

Joanne Alker, executive director of Georgetown University’s Center for Children and Families, called states moving toward longer periods of continuous coverage for minors “a positive outcome of the epidemic.”

He noted that from the fourth quarter of 2020 to the first quarter of 2022, the proportion of uninsured children in the US fell from 6.7% to 3.7%, largely due to emergency rules that prevented states from leaving Medicaid enrollees without coverage.

“States need to do a lot of publicity about this new policy so that all children leave the hospital with health insurance and parents don’t have to worry about coverage until the child goes to kindergarten,” Alkar said.

If the public health emergency ends next year, about 5.3 million children could lose Medicaid coverage, according to a federal analysis released in August. Of those, about 1.4 million will be removed from the rolls because they are no longer eligible, while about 4 million eligible children will lose coverage for administrative reasons, such as not submitting paperwork on time.

Because Medicaid family income thresholds are generally higher for children than for adults, children are less likely to lose coverage due to small changes in income. But they can lose their right to coverage if the parents don’t renew it each year, or the state doesn’t respond to requests for information to confirm the family’s income remains low enough to maintain eligibility.

Generally, Medicaid enrollees must report any changes in family income or other criteria that may affect their eligibility during the year, and states must act on these changes.

This creates a challenge for Medicaid recipients and state agencies, as people’s incomes often fluctuate. As a result, enrollees may lose coverage, be forced to switch between Medicaid and Affordable Care Act (ACA) subsidized marketplace coverage, or experience gaps in coverage if paperwork proves difficult to complete.

To address this problem, about half of states give children one year of continuous Medicaid eligibility, regardless of changes in family income. This group includes states controlled by both Republicans and Democrats, and states like Alabama and Mississippi, which did not expand Medicaid under the ACA.

Before moving to continuous coverage for children up to age 6, Oregon offered them 12 months of continuous eligibility. However, state Medicaid officials estimate that in 2019, before the pandemic began, more than 70,000 children under the age of 6—a third of those who were enrolled—moved in and out of Medicaid. About 29,000 of those children had gaps in coverage that exceeded six months, state officials told KHN.

Oregon officials estimate that after four years of implementation, the new enrollment policy will benefit more than 51,000 children by 2027, at a cost of $177 million.

“The public health emergency clearly demonstrated the value of having ongoing health insurance, especially for populations that experience health disparities and have historical barriers to accessing health care,” said Elizabeth Ghurst, a spokeswoman for the authority. State Medicaid programs.

The six-year guarantee would also reduce Oregon’s administrative costs, as it would not have to process some applications each year. And officials hope it will reduce the program’s medical costs, since children on Medicaid will have access to primary and preventive care services that can reduce medical needs associated with delays in seeking care.

Oregon offers Medicaid and CHIP coverage to children in families with incomes up to 300% of the federal poverty level, which is $83,250 for a family of four.

Lori Coyner, senior policy adviser for Medicaid in Oregon, said the change would reduce health disparities because it would help children of color maintain coverage and access to health care.

In addition to keeping children on Medicaid longer, Oregon won federal approval in October to give children 6 and older and adults two years of continuous eligibility, regardless of changes in your family’s income.

Nationally, KFF estimates that about 11% of children enrolled in Medicaid lost their coverage for at least one day in 2019. Washington state also reported 11%.

In California, Medicaid officials estimate that about 64,000—6%—of enrollees under age 5 were disenrolled and then re-enrolled in the same year.

Mike Odeh, health director of the California group Children Now, hopes the state will get on board soon. “We want to pay the state to take care of children instead of paying for paperwork,” she said, adding that re-registration every year can be a barrier for low-income families. “We want them to be healthy and ready for school,” Odeh said.

The California Department of Health Care Services, which oversees Medi-Cal, estimates the policy change will cost $39.1 million in 2025, assuming it takes effect in January, and $68 million for the 2025-26 fiscal year. The state is still weighing when to seek federal approval.

Medicaid officials in Washington state said they have considered continuing eligibility for children for several years. “Medicaid families are very busy, and the last thing they can think about is renewing their coverage, so it falls to the bottom of their priority list,” said Amy Dobbins, division director of the Office of Eligibility and Medicaid Policy.

Dobbins noted that the Covid public health emergency, during which more children were covered and received health services, strengthened the concept of continued eligibility.

Diane Hasselman, acting executive director of the National Association of Medicaid Directors, thinks some states will be wary of following Oregon’s lead. “State lawmakers may also be concerned about increased enrollment in the Medicaid program, especially at a time when enrollment has already grown significantly,” he said.

Also, lawmakers will not welcome expanding coverage to people in the workplace, such as with other insurance options, Hasselman added.

While some states are happy to keep children on Medicaid until age 6, Georgetown’s Alker stressed that Oregon’s new policy will take effect — at the end of a health emergency — as millions of children lose coverage.

“States that don’t pay attention to children’s needs after a public health emergency ends may experience a massive increase in uninsured children,” Alkar said. “So a very different situation is coming.”

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