Summary

Concerns have been raised that some children lose Medicaid coverage when family incomes rise or are otherwise ineligible for Medicaid coverage, yet have limited access to other sources of health insurance. Health insurance is particularly important to children with special health care needs. Without access to proper preventive health care and treatment services, these children are at higher risk for complicating illnesses and hospitalization. The proposed Family Opportunity Act of 2000 (S. 2274) would allow parents with a severely disabled child to buy health care coverage for the child through the Medicaid program. This testimony discusses (1) the role that Medicaid plays in providing health care coverage for children with disabilities, (2) the extent to which private insurance covers needed services for children with disabilities, and (3) the benefits and services available to children under the Medicaid program.

GAO noted that: (1) Medicaid generally covers children with disabilities who receive Supplemental Security Income (SSI) program benefits; (2) in December of 1999, almost 850,000 children were receiving SSI payments; (3) these children represent 18 percent of the 4.7 million children with chronic physical or mental conditions of which children with severe disabilities are a subset; (4) several options exist for states to expand coverage for children with disabilities or special health care needs in Medicaid besides the link to SSI eligibility; (5) in particular, spend down options can result in children being sporadically eligible for Medicaid, and states' expansions of eligibility for certain categories of children with disabilities may not be available to all children, even if they meet the eligibility and income requirements; (6) private health insurance is often not available and can be a more limited option for many children with disabilities; (7) in particular, families with children with special health care needs whose income rises above the maximum threshold allowed for SSI and Medicaid often have limited options for obtaining private health insurance that will cover the services the children need; (8) many of those leaving SSI and Medicaid work in lower-wage jobs that often do not have access to group coverage or may find their share of premium costs unaffordable; (9) while the Health Insurance Portability and Accountability Act of 1996 guarantees that certain children have access to individually-purchased health insurance without exclusions for pre-existing conditions, this coverage is also likely to be unaffordable for many; (10) for those individuals who do obtain private health insurance coverage, the benefits provided may be limited so that some services that are important for children with disabilities are not covered; (11) while private insurance generally covers acute health care services for children, Medicaid usually offers a more comprehensive package of benefits that includes the use of services designed for chronic and long term care needs; (12) Medicaid managed care programs, which a number of states have or are implementing for children with special needs, may have the capability to more comprehensively address their extensive and complex needs than private health insurance plans that serve few persons with such needs; and (13) in particular, managed care plans may link beneficiaries to a regular case manager and a care provider, thereby improving coordination and continuity of care.