Health Care Costs and Financing

Children often lose Medicaid coverage when their parents do, even though they are still eligible

The recent economic downturn and budget shortfalls have prompted all States to implement some form of cost containment in their Medicaid programs. However, States should be aware of the adverse impact on children when adults lose Medicaid coverage, according to a new study. Based on experience in Oregon, when adults lose Medicaid coverage, their children often lose coverage as well. That State's Medicaid program, which previously provided insurance to entire eligible households, implemented cost containment policies in March 2003.

Over 10 percent of eligible children were uninsured, and over 25 percent of them had gaps in insurance coverage during the 12-month study period following the policy implementation. Half of the uninsured children lived in a household with at least one adult who had recently lost Medicaid coverage compared with only 40 percent of insured children. Similarly, over 51 percent of children with a recent gap in insurance coverage had an adult in the household who recently lost Medicaid coverage compared with only 38 percent of children without coverage gaps.

Jennifer E. DeVoe, of the Oregon Health and Science University, and colleagues suggest that, whenever possible, programs designed to expand coverage for children should focus on providing stable coverage for entire households. They point out that, despite continued comprehensive public health coverage for children in Oregon, the percentage of uninsured children rose from 10.1 percent in 2002 to 12.3 percent in 2004 (over 110,000 uninsured children).

Their findings were based on analysis of State-wide data from low-income households enrolled in Oregon's food stamp program, whose children were presumed eligible for publicly funded health insurance programs. The researchers surveyed parents of these households about their child's insurance coverage during the year following implementation of Oregon's Medicaid cost containment policies. The study was supported in part by the Agency for Healthcare Research and Quality (HS14645 and HS16181).

See "Uninsurance among children whose parents are losing Medicaid coverage: Results from a statewide survey of Oregon families," by Dr. DeVoe, Lisa Krois, M.P.H., Tina Edlund, M.Sc., and others in the February 2008 HSR: Health Services Research 43(1, Part II), pp. 401-418.

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