FACT SHEET | April 27, 2007

Improving Health Coverage for Children is America's Top Health Priority

Improving health coverage for children through reauthorization of the State Children’s Health Insurance Program (SCHIP) is the top health priority for Congress. SCHIP has played a crucial role in helping to reduce the rate of uninsured lower-income children over the past ten years. The program requires reauthorization by Congress by September 30^th of this year. While the Bush Administration would have Congress ratchet back our commitment to SCHIP, in effect cutting off coverage for 1.6 million children and low-income adults, the Senate is committed to enrolling all eligible children, and supporting state efforts to expand coverage. As we observe “Cover the Uninsured Week,” Senators are working to ensure that America’s neediest children get the care and health coverage they need. 

Because of SCHIP, millions of children who would otherwise be uninsured now have coverage. SCHIP was created in 1997 to provide health insurance coverage to children who would otherwise be uninsured. Most newly-enrolled children were previously uninsured or recently lost their Medicaid or private health coverage (Congressionally Mandated Evaluation of the State Children’s Health Insurance Program, Final Report to Congress, Wooldridge and Kenney et al, October 2005). SCHIP is targeted to low-income families who do not qualify for Medicaid, but are unable to afford private insurance, and the program has made great strides in covering uninsured children. While the number of uninsured adults has increased, the percentage of children without health insurance dropped by about one-third from 1997 (the inception of the SCHIP program) to 2004 (Kaiser Commission on Medicaid and the Uninsured, January 2007). 

Having SCHIP coverage matters. Since its inception, SCHIP has been an important health care safety net for children.A literature reviewpublished in January by the Center on Budget and Policy Priorities discusses the benefits to children of having SCHIP coverage – better access to quality medical care and improved health: 

·Research has shown that children who have access to a “medical home,” a usual place to receive their care, increases the quality and continuity of children’s health care. Children covered by Medicaid or SCHIP are much more likely to have a medical home than children who are uninsured. 

·A direct measure of access to medical care is whether a child has seen a physician or other health professional in the past year. Children enrolled in Medicaid and SCHIP are much more likely than uninsured children to have seen a physician within the past year. 

·Children covered by Medicaid or SCHIP are much more likely than uninsured children to have preventive health care and to keep up with recommended schedules of well-child visits. 

·With increased access to medical care, children covered by Medicaid or SCHIP have improved health. Approximately one-quarter of children covered by Medicaid or SCHIP are in better health now than they were one year ago, according to their parents or caretakers. This improvement exceeds the gains reported for both uninsured and privately-insured children.

 

SCHIP is especially important to minority communities. SCHIP, together with Medicaid, is responsible for gains in both coverage and access for children in all racial and ethnic groups. The two programs have also helped to narrow racial and ethnic disparities in access to care among low-income children (Kaiser Commission on Medicaid and the Uninsured, April 4, 2007).For example, since SCHIP’s inception in 1997, the percentage of uninsured Hispanic children has decreased by nearly one-third, from 30 percent to 21 percent, and the percentage of uninsured African American children has decreased by almost one-half, from 20 percent to 12 percent (U.S. Census Bureau, Current Population Survey, 2006 Annual Supplement).Despite these successes, a disproportionate number of uninsured children belong to communities of color, including more than 1.5 million African-American children and 3.5 million Hispanic children (Robert Wood Johnson Foundation, April 24, 2007). More than 80% of uninsured African American children, and 70 percent of uninsured Hispanic children appear to be eligible for public coverage (Families USA, December 2006), and SCHIP reauthorization should provide states with the tools and resources necessary to identify and cover these children.

 

With the increasing decline in employer-based health care coverage, the number of uninsured children is increasing. Despite the success of SCHIP, the gains in coverage achieved under the program have been offset in recent years by a decline in employer-sponsored health insurance. A March 14 study prepared for the Robert Wood Johnson Foundation (RWJF) by the State Health Access Data Assistance Center (SHADAC) at the University of Minnesota found that fewer than half of parents in families earning less than $40,000 a year are offered health insurance through their employer – a nine percent drop since 1997. The study further found that employer offers of health insurance to parents with lower incomes have fallen three times as fast as offers to parents who earn more money. As employer-sponsored health insurance coverage has eroded, the number of uninsured children has increased since 2004. In reauthorizing SCHIP, Congress should provide sufficient funding for the program to ensure that children whose parents work hard retain the coverage and care some have through SCHIP.

 

Most uninsured children have parents who work, but can’t get or afford private health insurance for their children. According to the Kaiser Commission on Medicaid and the Uninsured, approximately nine million children in the United States are uninsured – about one in every eight kids. Of these uninsured children, the RWJF-SHADAC study found that nearly two out of three (64 percent) live with adults who earn modest incomes (defined in the study as roughly $40,000 or less for a family of four, which is about 200 percent of the federal poverty level). Again, many of these uninsured children are eligible for SCHIP, but have not enrolled.

 

The disparities in health insurance coverage between citizen and legal immigrant children have grown significantly larger.While there are fewer uninsured children since the enactment of SCHIP, the percentage of lower-income legalimmigrant children who lack health insurance coverage has increased since 1996 when federal legislation restricted the eligibility of legal immigrants for SCHIP and Medicaid during their first five years in the United States. Today, almost half of lower-income immigrant children are uninsured. (Center on Budget and Policy Priorities, April 2007) Prior to 1996, states had the option to provide SCHIP and Medicaid coverage to legal immigrant children and pregnant women. Legislation to restore states’flexibility to use this option has passed the Senate with bipartisan support several times, but has never been enacted into law. SCHIP reauthorization provides a unique opportunity to reestablish state flexibility in this area.

 

Children without health insurance suffer serious consequences.Research has shown that uninsured children not only miss regular checkups and visits to the doctor for less-serious conditions, but also receive less and lower-quality care even in instances where hospital services are required. 

·A study commissioned by the Kaiser Family Foundation and featured in the Journal of the American Medical Association on March 14, 2007 found that patients without health insurance are less likely to receive treatment after injuries or diagnoses of chronic diseases. In addition, the study found that patients without health insurance are less likely to receive necessary follow-up care than those with health insurance coverage. 

·A report issued by Families USA on February 27, 2007 indicated that children without health insurance receive less and inferior care. For those uninsured children with severe illnesses or injuries, this can lead to serious – even tragic – consequences. For example: 

·Among children admitted to a hospital with appendicitis, uninsured children were 19 percent less likely to receive a laparoscopic appendectomy, a less invasive and less painful way to remove the appendix than traditional open surgery. 

·Among children admitted to a hospital with middle ear infections, uninsured children were less than half as likely to get ear tubes inserted than insured children. 

·Uninsured children admitted to a hospital due to injuries were twice as likely to die while in the hospital as their uninsured counterparts. 

·Uninsured children are twice as likely as insured children to miss out on needed medical care, including doctor visits and checkups. 25.6 percent of children who are uninsured do not receive any medical care, compared to 12.3 percent of children who are insured (RWJF, August 2006).

1.4 million children stand to lose their existing coverage under the President’s approach. The President and a number of Congressional Republicans have called on Congress to ratchet back SCHIP coverage to limit coverage to children in families earning no more than twice the federal poverty level. The President has also called for a reduction in the federal matching rate for children in families with incomes above 200 percent of the federal poverty line, and for SCHIP-covered adults, the large majority of whom are working-poor parents of children enrolled in Medicaid or SCHIP. If adopted, not only would the President’s proposals fail to make any headway towards covering the nation’s nine million uninsured children, but his approach would also effectively cut off health coverage for over a million people. According to data released by the Congressional Budget Office on March 9: 

·States would face a total federal funding shortfall of as much as $7.6 billion over the next five years (assuming current SCHIP matching rates are retained). If adopted, the Administration’s proposal to reduce the federal SCHIP matching rate for certain beneficiaries would reduce the shortfall to $4.6 billion, but would shift up to $4 billion in costs to the states, requiring them either to increase their own contribution to the costs of SCHIP or substantially cut their programs. 

·SCHIP enrollment of children and pregnant women over the course of a year would decline from 7.6 million in 2007 to 6.2 million by 2012, a reduction of 1.4 million. Total SCHIP enrollment would fall by 1.6 million.

 

The reauthorization of SCHIP should not cause more Americans to become uninsured, as would result from the President’s approach. At a time when the number of uninsured has reached approximately 45 million people, Congress should be working to expand health coverage, not causing individuals to lose the coverage they now have. 

·Research has shown that insuring parents is an effective way to increase children’s participation in public programs. Studies have also indicated that covering parents helps eligible low-income children retain their coverage when it comes up for renewal, so that fewer children lose insurance at that time. (Urban Institute, February 2007 and Center on Budget and Policy Priorities, October 2006)

·When their parents are insured, children have better access to health care and improve their use of preventive health services. Even among children who are already enrolled in Medicaid, studies have shown that children whose parents are insured are more likely to receive health care services they need, such as preventive health care, than insured children whose parents are uninsured. (Urban Institute, February 2007 and Center on Budget and Policy Priorities, October 2006)

·Eliminating existing coverage for parents results in not only more uninsured parents, but more uninsured children as well. (Center on Budget and Policy Priorities, October 2006)

·Ironically, although the Bush Administration now condemns the use of SCHIP funds to cover adults and higher-income children, the Administration has previously encouraged states to cover parents and has even lauded such coverage flexibility as a good way to reduce the number of uninsured Americans: 

·At a Finance Subcommittee on Health Care hearing about SCHIP on July 25, 2006, former CMS Administrator Mark McClellan stated, “Extending coverage to parents and caretaker relatives not only serves to cover additional insured individuals, but it may also increase the likelihood that they will take the steps necessary to enroll their children. Extending coverage to parents and caretakers may also increase the likelihood that their children remain enrolled in SCHIP.” 

·Commenting on HHS approval of California’s waiver of SCHIP rules to allow the state to expand coverage to 300,000 uninsured individuals, then-HHS Secretary Tommy Thompson said, “By giving parents of children in the SCHIP program health insurance, we are providing quality health care to the whole family…. This will make it easier for moms and dads to care for their children, since they themselves will have access to the care they need to stay healthy.“ (HHS Press release, January 24, 2002)

·All of the states now covering adults have programs that were approved by HHS to expand SCHIP coverage. Denying the necessary funding to maintain this coverage going forward retreats from the federal government’s previous promise on which states have relied, and would cause significant harm to those individuals who stand to lose their coverage. 

·Eliminating existing adult coverage will only add to the number of uninsured, and would do little to solve SCHIP’s funding issues. In Fiscal Year 2006, approximately 585,000 adults (pregnant women, parents, and childless adults) were covered with SCHIP funds, compared to more than 6.6 million children. 

We should support SCHIP without undermining the promise of coverage it provides today. 

Reauthorization of SCHIP should protect more – not fewer – people. Providing for our children’s medical care is one of our nation’s most important priorities. That is why a bipartisan majority of the Senate rejected the inadequate funding for SCHIP proposed by the President. The Budget Resolution approved by the Senate provides for up to $50 billion for SCHIP over five years to expand coverage to the estimated six million children eligible but not enrolled in either SCHIP or Medicaid, and to maintain coverage for all currently-enrolled individuals.

DPC