Children First

Bipartisan consensus is a concept rarely associated with the current U.S. Congress. One policy issue, however, has drawn support from both sides of the aisle in recent years: addressing the plight of the nation's 10 million uninsured children. After all, children are the segment of the population least able to control whether or not they are insured. They are also the least expensive to cover. Unsurprisingly, in the aftermath of the 1994 debacle, the most significant investment the federal government has made in health care is the creation of the Children's Health Insurance Program (CHIP). There are now two government programs available to lower-income, uninsured children: Medicaid, which serves our most destitute children, and CHIP, which is targeted toward kids in working-class families.

Gregg Haifley of the Children's Defense Fund (CDF) estimates that two-thirds of uninsured children qualify for Medicaid or CHIP. Yet these children continue to go without insurance--and not because their parents have some aversion to government-provided coverage. According to a survey from the Kaiser Commission on Medicaid and the Uninsured, 93 percent of parents whose uninsured children were eligible for Medicaid said they would be willing to enroll their kids in the program; 91 percent believe that having health coverage for their children is important. Statistics show that this belief is well founded: Families USA says that uninsured children are six times more likely than children with private insurance to go without needed medical care.

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The failure of Medicaid and CHIP to provide health coverage to all needy children can be traced to the fact that these programs were never conceived to be available to every American under the age of 18. Here a comparison to Medicare, the health care program for the elderly, is instructive. Medicare is a universal program: Once Americans hit the age of 65, they are automatically enrolled. (For that reason, 98.7 percent of elderly Americans have health insurance, according to the U.S. Census Bureau.) Medicaid and CHIP, in contrast, are means-tested programs. Administrators must identify families that might be eligible for help, determine whether these families do in fact qualify, and then constantly reevaluate children's eligibility to remain in the program. Unfortunately, many states aren't quite up to this yeoman's task.

In fact, for years many state governments were more interested in keeping children out of Medicaid than in encouraging families to sign up for assistance. California's application form, for example, was anything but user-friendly; it was 40 pages long. As Gregg Haifley of CDF puts it, stock-owning citizens' tax returns weren't that lengthy. In some parts of the country, Medicaid applicants had to provide ample documentation of families' economic holdings--right down to the value of their car. And even after the federal government separated Medicaid from welfare in 1989, some states insisted that applicants go to welfare offices for a face-to-face interview, which was neither convenient for working parents nor (given the comportment of some welfare caseworkers) particularly pleasant.

After the passage of CHIP three years ago, however, most state legislatures began making much more of an effort to reach out to eligible kids. This newfound enthusiasm was partially the result of a big public relations push from the White House and health care activist groups, which were eager to spread the word about the new program. In addition, CHIP provided states with more money and flexibility than Medicaid. Armed with their CHIP funds, many states unfurled glossy ad campaigns, brought state employees up to speed on the fine print of government regulations, and truncated applications (the aforementioned 40-page California form is now only four pages).

Despite these efforts, it's been difficult to make a significant dent in the numbers of uninsured children. Some working families without insurance simply assume that they are ineligible for assistance because at least one parent holds a job. And states with large immigrant populations, like New York and California, have found that illegal residents are hesitant to enroll their children in CHIP or Medicaid, even when their sons or daughters are U.S. citizens, for fear that noncitizen family members could be targeted for deportation or might jeopardize their opportunity to become legal U.S. residents. According to Families USA, 21 percent of uninsured children come from mixed-citizenship families. Unless program administrators can communicate to these parents that their families will not be penalized for enrolling their citizen children in government health programs, this fear could be a significant obstacle to paring down the number of children without health insurance.

Unfortunately, the numbers of uninsured children could increase in the future. According to benefits consultant group William M. Mercer, health care costs will rise significantly. If this happens, more employers will drop coverage for low-wage workers and their dependents. The CHIP program, meanwhile, has not been designed to expand automatically if more children lose their health coverage and qualify for government assistance. CHIP is a bloc-grant program; that is, Uncle Sam gives participating states a parcel of money, and state governments can define benefits and cap enrollment in the program as they see fit. In an economic downturn, some states may decide to get their budgets under control by skimping on CHIP.

If we are really serious about ensuring that all American children have health coverage, we should create a program for them that is roughly analogous to Medicare. Senator John D. Rockefeller IV of West Virginia and Congressman Pete Stark of California, both Democrats, have offered a proposal to enroll all children into a "MediKids" program at birth. Parents would be charged a premium on their annual income tax returns for each month during the year when no other form of health insurance was available to their children. Enrollees would maintain their eligibility until age 23. As Rockefeller explained when he introduced the legislation, a major boon of this approach is that it would largely eliminate "challenging outreach, paperwork, or re-determination hoops to jump through." Under our current system, an enormous amount of effort goes into tracking down eligible children, sorting out whether they qualify for Medicaid or CHIP, and determining whether they maintain their eligibility as their parents' salaries fluctuate and employment status changes. By enrolling all children in a national health program, we would go a long way toward ensuring that every child has access to quality health care--a guarantee that children in virtually every other industrial country can already count on. ยค