States Renew Efforts to Expand Insurance Coverage for Low-Income Children and Parents, New Survey Finds

Many states have resumed efforts to reduce the number of uninsured people, particularly children—a path states were pursuing in the late 1990s before a series of fiscal crises drained their budgets. Between July 2005 and July 2006 one-third of states increased access to health coverage, and for the first time in four years no state cut income eligibility for Medicaid and the State Children's Health Insurance Program (SCHIP), according to the sixth in a series of annual surveys conducted by the Center on Budget and Policy Priorities for the Kaiser Commission on Medicaid and the Uninsured.

Seventeen states increased access to health coverage. Hawaii, Illinois, and Massachusetts initiated significant expansions to cover children, and a number of other states undertook more incremental expansions for children, parents, and pregnant women. Some states also removed or lessened paperwork, procedural, or financial barriers. Two—Connecticut and New Mexico—renewed simplification initiatives that they had abandoned earlier in the decade.

The 50-state survey also raised concerns that some provisions of the Deficit Reduction Act of 2005 will erode states' renewed enthusiasm to expand coverage. A large number of states are experiencing declines in Medicaid enrollment as a result of the law's new requirements for proof of citizenship. Although states are using various approaches to lessen the burden on eligible families, a growing number of states are reporting large backlogs because applications are incomplete or because eligibility reviewers must spend more time on each case. In addition, several states raised premiums for children's health coverage or introduced premiums for families whose low incomes formerly exempted them, although these changes were less substantial than in recent years. Idaho, Indiana, Maryland, Minnesota, New Jersey, and Pennsylvania took at least one of these steps. Under the Deficit Reduction Act, states for the first time can require cost-sharing for some children in Medicaid, and beneficiaries with income above the poverty line can be denied care if they cannot afford to pay. However, Kentucky was the only state to use this new option to impose copayments. Kentucky also imposed copayments in its SCHIP program.

Even though no state cut income eligibility for Medicaid or SCHIP, some states restricted eligibility by imposing asset tests (South Carolina) or waiting periods during which children must be uninsured before they can apply for coverage (Florida). Utah reinstated its SCHIP freeze—the only state in 2006 to do so.

The report highlights the sharp disparity that persists between the income levels at which parents and children qualify for health coverage. Numerous studies show that expanding parents' coverage not only reduces the number of uninsured parents, but also increases enrollment by eligible children. Although most states cover children with family incomes of up to 200% of the poverty line, in 35 states family income must be below the federal poverty line for a parent to qualify for coverage. In 14 states, parents with an income of half the federal poverty line—just $692 per month for a family of three—earn too much to qualify for Medicaid themselves.

Federal policies will significantly influence the progress that states will be able to make in the next year, the report notes. Congress is preparing to reauthorize SCHIP, and the level of federal funding it allocates to the program will be critical, as will be sustaining Medicaid and ensuring that states can continue with the simplified enrollment and renewal systems that they have built over the past decade.

The 65-page report, which has an extensive appendix of tables with detailed data for each state, is available on the Kaiser Commission Web site at www.kff.org/medicaid. PowerPoint slides with key data and several fact sheets on Medicaid and SCHIP are also available.