More upper-income children insured, census says, but not so for the poor

New data from the U.S. Census Bureau indicating a drop in the overall number of Americans without health insurance is welcome news, but it still highlights problems faced by poor citizens, according to the Center on Budget and Policy Priorities in Washington, DC.

"Our main concern is that despite generally good news, it’s pretty much confined to upper-income people," Center senior fellow Leighton Ku tells State Health Watch. "We see some improvement in participation among low-income children, but it’s hard to say why that is."

The Census Bureau said the number of uninsured fell in 1999 from 44.3 million to 42.6 million, the first decline since 1987. More than half the drop was driven by improvements in health care coverage for children, some analysts said. Many of the children who gained coverage were poor children, suggesting to some that efforts to enroll more Medicaid-eligible children in coverage and to implement state Children’s Health Insurance Programs (CHIPs) are beginning to show results.

But the Center on Budget and Policy Priorities says the data also indicate that states are still struggling to ensure that welfare reform does not have the unintended consequence of causing families with children to miss out on coverage. Although children in poor families are gaining ground, they still are more likely to be uninsured than they were before enactment of 1996 welfare reform legislation. In addition, according to Center policy analyst Jocelyn Guyer, the parents’ insurance situation still appears to be deteriorating. Unlike children in poor families, she says, it appears that parents in poor families have not yet started to regain the ground lost in the wake of welfare reform.

The Census Bureau’s data indicate that more than half of poor adults between the ages of 24 and 34 were uninsured in 1999. They were from one of the few groups among which the proportion of the uninsured increased. The data also indicate that employment does not protect poor adults against being uninsured. Close to half of poor workers lacked coverage in 1999, compared with two out of five who were not working.

In a study released shortly before the Census Bureau’s report, Mr. Ku said he had found that expanding state Medicaid programs to provide coverage for parents also increased the number of low-income children protected by health insurance.

While more than nine of 10 children from families with incomes below twice the poverty level are now eligible for Medicaid or CHIP, 25% of them (7.9 million children) remained uninsured in 1998. Part of the reason, Mr. Ku says, is the ineligibility of the children’s parents for public insurance. Medicaid eligibility for parents typically ends at about 60% of the poverty line or about $10,000 for a family of four. As a result of this low eligibility limit and substantial gaps in employer coverage for low-wage workers, 34% of low-income parents are uninsured. Most of those people work but earn low wages.

"Including parents [in government coverage] is a good strategy not only because it reduces the uninsured population generally and supports work, but also because it helps assure that children have needed coverage," Mr. Ku says.

Data support the notion that allowing an entire family to apply at the same time will increase the probability that the children in the family will be covered.

In the past two years, 10 states have broadened their Medicaid programs to include coverage for parents in low-income families, an option available to them through the 1996 welfare reform law. The Clinton administration and some members of Congress have proposed legislation that would lead to expansion of coverage in a larger number of states. The Health Care Financing Administration said it will consider waivers that would allow states to use CHIP funds to provide coverage to parents.

Mr. Ku says his research found that in three states that expanded Medicaid coverage to parents early, Hawaii, Oregon, and Tennessee, coverage of young children rose by 16% between 1990 and 1998. In 1998, in those three states, 67% of the eligible low-income children under age 6 had Medicaid coverage, up from 51% in 1990. But in states that did not expand coverage, the percentage of low-income children covered through Medicaid only rose from 51% to 54%.

The survey also found that states can reduce the uninsured population with broad Medicaid expansions that include parents without significantly discouraging employer-provided coverage, Mr. Ku says, and the survey found that family-based Medicaid expansion substantially improves health care access and utilization for both adults and children.

Mr. Ku looked at Medicaid expansions in Tennessee and Minnesota and found that reductions in private coverage were very modest and the result was a substantial increase in the overall size of the insured population.

In regard to the most recent Census Bureau data, Ms. Guyer says the disparity between the progress among poor children and the stagnation or deterioration in coverage among poor adults in prime child-rearing years suggests the importance of the initiatives under consideration in many states and at the federal level to transform children’s health programs into family health programs.

Analyzing the data, the March of Dimes reported that Arizona and Texas lead the nation in the percentage of uninsured children with 25% each, while Vermont and Rhode Island had the lowest percentage, 7.2% and 7.5% respectively. March of Dimes president Jennifer Howse says the data show that "states must move much faster to enroll eligible children and take full advantage of available federal funds." The organization says it has identified increasing access to health coverage for women, infants, and children as a top priority for its chapters across the country.

Contact Mr. Ku at (202) 408-1080.