Multiple Factors Appear to Be Contributing to Children’s Rising Uninsured Rates

US Census Bureau data released this past week revealed 8.5 percent (27.5 million people) did not have health coverage at any point during 2018 – an increase from 7.9 percent (25.6 million people) in 2017. The latest census data also affirmed fears raised after reports of declining child enrollment in Medicaid and the Children’s Health Insurance Program (CHIP) that there was a rise in the overall uninsured rate for children – at 5.5 percent in 2018 – for the second year in a row.

Children’s uninsured rates have steadily decreased from 2008 when it was 9.7 percent to an all-time low in 2016 of 4.7 percent. However, the downward trend began to reverse in 2017 when the rate of uninsured children rose to 5 percent nationally and it has increased again in 2018. The resounding questions posed by state officials responsible for covering children in Medicaid and CHIP and other stakeholders are:

  • Why is children’s enrollment in public coverage programs declining and the uninsured rate increasing?
  • What is prompting an almost decade-long trend of increasing coverage for children to reverse?

According to the state officials who met and discussed children’s insurance enrollment at the 32nd annual National Academy for State Health Policy’s (NASHP) annual conference last month, there are no simple answers to these critical questions. They suggest that multiple factors, outlined below, are contributing to the decline.

Eligibility, Enrollment, and Retention Policies, Practices, and Systems

State officials explained that at the first indication of decreases in child enrollment in public programs, they looked inward to find a possible eligibility or enrollment system issue or policy problem to address. Although no one reported a major issue, many officials acknowledge that these policies and systems require continual updating and improving. Many officials want to further streamline the enrollment process for families by utilizing technology and existing data more fully, requiring less frequent renewals, and improving communication of what can be complex information for parents. Frustrating to many, these goals are not new and some are explicitly required by the Affordable Care Act (ACA), but still need attention. As states assess their systems and policies, there is a wealth of resources available to help them better target their investments.

This data suggests a strong economy does not guarantee access to health insurance. The 2018 data indicates that the percentage of people with private coverage (employer-sponsored, purchased, or Tricare) did not statistically change between 2017 and 2018. Therefore, even if the economy is helping families secure employment or increased income, it does not appear to guarantee access to health insurance.

The Strong Economy

It makes sense that during this time of job growth and low unemployment there would be a decreased need for public coverage programs. However, the data indicates that in 2018 the highest percentage of uninsured children (7.8 percent) were in families with incomes below 100 percent of the federal poverty level (FPL), which represents an increase over 2017. Also notable is the 0.7 percent increase between 2017 and 2018, of uninsured of children in families with incomes above 400 percent of FPL. This data suggests that a strong economy does not guarantee access to health insurance. Further, the 2018 data indicates that the percent of people with private coverage (employer-sponsored, purchased, or Tricare) did not statistically change between 2017 and 2018. Therefore, even if the economy is helping families secure employment or increased income, it does not appear to guarantee access to health insurance.

Changes to National Immigration Policies

State officials also suggested that changes to federal immigration policies have an effect on the decline in children’s enrollment in public programs and the increase in overall uninsured rates. According to a 2018 Urban Institute survey, the rule allowing the Department of Homeland Security to consider immigrants’ use of Medicaid when determining if they are or could become public charges has had a chilling effect on enrollment even before the rule became final. Although children’s use of Medicaid and CHIP is explicitly excluded from the final public charge rule, it is a complicated rule and is likely unclear to families who must determine how use of public coverage could affect their potential citizenship status. The data confirms that in 2018 naturalized citizens were 2.2 percent more likely to be uninsured. The data also indicates that in 2018, 8.7 percent of Hispanic individuals were uninsured, which is double the rate of other races or ethnicities in the report. All of which supports the speculation that immigration policy changes have had an impact on the rising rate of uninsurance.

Lack of Outreach and Marketing Funds

Outreach and marketing often take a backseat to other administrative and operational budget demands, particularly because state resources are already stretched thin. Instead, many state children’s coverage programs maintain active partnerships with community-based organizations and seek other low- or no-cost ways to get the word out about the availability of coverage. However, more and more state officials would like the opportunity to engage families to help them identify what messages resonate and the best ways to deliver them, such as social media or more traditional advertisements. State Medicaid and CHIP programs were benefiting from the federal navigator program that supported individualized health coverage application assistance, but in recent years, federal investment in that program has steadily declined.

Federal Policy Changes Affecting Affordability and Undermining the ACA

Finally, some state officials acknowledge that federal policies that supported the ACA have changed and may have impacted uninsured rates. Such policies include the elimination of the cost-sharing reductions and the federal reinsurance program, as well as others that have resulted in higher health insurance premiums and as a consequence lower enrollment. It is suspected there could be a relationship between parents’ loss of coverage and the decline in children’s enrollment. The ACA requires parents seeking coverage through health insurance marketplaces to enroll their eligible children in Medicaid or CHIP. If parents, who are no longer subject to the federal insurance mandate, are deterred by cost from seeking to enroll themselves in coverage, they may be missing the prompt to enroll their children during ACA’s open enrollment period and it could be a factor in the climbing child uninsured rate as well.

Without a clear cause and with multiple contributing factors for the declining children’s enrollment in public programs and the rising uninsured rate, states are challenged to identify how best to invest their limited resources to the address this issue, though many officials are deeply engaged in addressing this problem. NASHP will continue to work with states to understand better the emerging enrollment and uninsured data and to provide resources on tested and effective enrollment and renewal policies and practices to support state efforts to make sure eligible families have health coverage.