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Journal Issue: Health Insurance for Children Volume 13 Number 1 Spring 2003

Health Insurance for Children: Analysis and Recommendations
Eugene M. Lewit Courtney Bennett Richard E. Behrman

Introduction

Ten years ago, health insurance coverage for children in the United States appeared to be on the decline. At that time, in the first issue of The Future of Children that focused on health care, we observed that high and rising health care costs, an economic downturn, and concern that the "dynamics in the private health insurance market make continued coverage unpredictable" were all contributing to the public's dissatisfaction with the health care system.1 The evidence presented in that journal issue suggested that children's health care was being adversely affected by the same forces buffeting the rest of the health care system. For example, one article reported that children were much more likely to lack health insurance in 1987 than in 1977 and that, over that same period, health care used by uninsured children declined relative to use by children with coverage.2 As this issue goes to press, the economy is once again in a recession after years of strong growth, health care costs are rising rapidly again after several years of moderate growth, and the number of uninsured is growing. Unlike the situation a decade ago, however, the rate of uninsurance among children, which peaked in 1998 at 15.4%, has been declining recently, thanks to the expansion of public health insurance programs for children.

The national commitment to public health insurance programs for children has evolved over several decades, beginning in 1965 with Medicaid for poor children and culminating in 1997 with the enactment of the State Children's Health Insurance Program (SCHIP) for the uninsured children of working, low-income families. Nationally, almost two-thirds of all children are covered by employer-sponsored health plans offered to their parents in the workplace. Although many low-income children—children in families with incomes below 200% of the federal poverty level (FPL)—have access to employersponsored insurance through their parents, many parents cannot afford the premiums to cover the entire family. Other low-income parents work in low-paying jobs that do not offer health coverage, and these parents cannot afford to purchase insurance on their own. For the children of such parents, public coverage plays a critical role. In 2001, Medicaid and SCHIP provided coverage to approximately 24 million children (30% of all children and more than 40% of low-income children), and in 2002, federal and state funds of more than $40 billion were spent on health coverage for low-income children.3

The public investment in children's health insurance reflects both a national commitment to protect children's health and the social value that Americans place on children's well-being. Public-opinion surveys demonstrate broad public support for children's health insurance; and although many factors in children's physical and social environments influence their health and well-being, health insurance is an important tool that gives children access to crucial health services.

Despite the progress of recent years, high uninsurance rates among low-income children and families continue to be a difficult and complex policy problem, while state and federal budget deficits coupled with problems with the federal funding formula for SCHIP threaten to undo recent gains. Yet, the findings presented in this journal issue suggest that Medicaid and SCHIP have demonstrated their potential for improving the lives of America's most vulnerable children. If states and policymakers build on the success of existing programs, these programs could eradicate uninsurance among low-income children in the United States.

This journal issue addresses some of the most persistent questions related to publicly funded health insurance for children and synthesizes lessons learned about how to make these programs more responsive to the needs of low-income children. Among the questions addressed are: Which children are still uninsured and why? What are effective ways to enroll eligible children in public health insurance programs and keep them enrolled? How can public insurance programs better serve the needs of especially vulnerable children, including children with special health care needs, adolescents, and children in immigrant families? We also highlight some creative ways to insure more children.

This article frames some of these issues and draws on the most current research to point to solutions to persistent problems. The article begins by discussing the importance of health insurance for children's access to health care and describes the progress that has been made in providing coverage for children. The challenges in fulfilling the promise of public health insurance programs are discussed, as well as the steps to extend these programs and implement strategies to cover virtually all low-income children.