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The Scientific Evidence for Child Health Insurance

  • Peter G. Szilagyi
    Correspondence
    Address correspondence to Peter G. Szilagyi, MD, MPH, Department of Pediatrics, Strong Memorial Hospital, Rochester, New York 14642
    Affiliations
    Department of Pediatrics, Strong Memorial Hospital, Rochester, NY (Dr Szilagyi); Department of Medicine, Children's Hospital Boston, Boston, Mass (Dr Schuster); Harvard Medical School, Boston, Mass (Dr Schuster); RAND, Santa Monica, Calif (Dr Schuster); and Division of General Pediatrics and Adolescent Medicine, Johns Hopkins University, Baltimore, Md (Dr Cheng)
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  • Mark A. Schuster
    Affiliations
    Department of Pediatrics, Strong Memorial Hospital, Rochester, NY (Dr Szilagyi); Department of Medicine, Children's Hospital Boston, Boston, Mass (Dr Schuster); Harvard Medical School, Boston, Mass (Dr Schuster); RAND, Santa Monica, Calif (Dr Schuster); and Division of General Pediatrics and Adolescent Medicine, Johns Hopkins University, Baltimore, Md (Dr Cheng)
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  • Tina L. Cheng
    Affiliations
    Department of Pediatrics, Strong Memorial Hospital, Rochester, NY (Dr Szilagyi); Department of Medicine, Children's Hospital Boston, Boston, Mass (Dr Schuster); Harvard Medical School, Boston, Mass (Dr Schuster); RAND, Santa Monica, Calif (Dr Schuster); and Division of General Pediatrics and Adolescent Medicine, Johns Hopkins University, Baltimore, Md (Dr Cheng)
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      As President-elect Obama and the 111th US Congress assume leadership, we hope that they will work together to put children's health issues, and in particular, health insurance for children, on the national agenda. The new leadership will likely address 2 critical policy options related to child health insurance: reauthorization and potential expansion of the State Children's Health Insurance Program (SCHIP), and expansion of health insurance to all children. We hope that policy makers keep in mind the substantial body of scientific evidence about SCHIP and child health insurance.
      • Szilagyi P.G.
      • Cheng T.
      • Simpson L.
      • et al.
      Health insurance for all children and youth in the United States: a position statement of the Federation of pediatric organizations.
      This commentary reviews the scientific evidence for child health insurance and also highlights areas in which more evidence is needed.
      A growing body of evidence supports the value of paying increased attention to children's health issues, especially for children who are vulnerable because of chronic conditions or social circumstances. Research has demonstrated the profound and potentially lifelong influence of positive and negative childhood experiences. Nobel Laureate economist James J. Heckman emphasizes that early investment in the education and well-being of disadvantaged children leads to enduring benefits throughout the lifespan. A focus on children and children's health promises to pay off with substantial downstream benefits.
      • Szilagyi P.G.
      • Cheng T.
      • Simpson L.
      • et al.
      Health insurance for all children and youth in the United States: a position statement of the Federation of pediatric organizations.
      • Genel M.
      • McCaffree M.A.
      • Hendricks K.
      • et al.
      A National Agenda for America's Children and Adolescents in 2008: recommendations from the 15th Annual Public Policy Plenary Symposium, annual meeting of the Pediatric Academic Societies, May 3, 2008.
      • Heckman J.J.
      • Krueger A.B.
      • Friedman B.M.
      Inequality in America: What Role for Human Capital Policies?.
      An important component of child health involves health insurance.
      The Obama proposal for health care reform, as presented during the campaign, included a Medicare-like health plan for uninsured individuals of all ages.
      • Oberlander J.
      The partisan divide—the McCain and Obama plans for U.S. health care reform.
      The proposal emphasized a choice of insurance options, so that uninsured families or small businesses could opt into the plan. Although it did not mandate health insurance coverage for adults, it included a mandate for health insurance coverage for children through either private or public insurance options.
      Several lessons have been learned from over 30 years of studies of health insurance for children.
      • Lohr K.N.
      • Brook R.H.
      • Kamberg C.J.
      • et al.
      Use of medical care in the RAND Health Insurance Experiment.
      • Jeffrey A.E.
      • Newacheck P.W.
      Role of insurance for children with special health care needs: a synthesis of the evidence.
      Committee on Consequences of Uninsurance Institute of Medicine
      Health Insurance Is a Family Matter.
      First, a large body of evidence demonstrates that lack of health insurance among children and adolescents is associated with delays in needed health care; foregone care; lack of receipt of preventive, acute, or chronic services; lower quality of care; and in many cases suboptimal health outcomes.
      Committee on Consequences of Uninsurance Institute of Medicine
      Health Insurance Is a Family Matter.
      • Lewit E.M.
      • Bennett C.
      • Behrman R.E.
      Health insurance for children: analysis and recommendations.
      Although not all uninsured children suffer such adverse consequences, the lack of insurance for medical or dental care increases their risk of poor health outcomes. Second, many studies have demonstrated that lack of health insurance among children with special health care needs represents a particularly risky situation
      • Jeffrey A.E.
      • Newacheck P.W.
      Role of insurance for children with special health care needs: a synthesis of the evidence.
      Committee on Consequences of Uninsurance Institute of Medicine
      Health Insurance Is a Family Matter.
      because such children often require substantial care from primary, specialty, and ancillary services to address their chronic health problems.
      • Homer C.J.
      • Klatka K.
      • Romm D.
      • et al.
      A review of the evidence for the medical home for children with special health care needs.
      • Perrin J.M.
      • Romm D.
      • Bloom S.R.
      • et al.
      A family-centered, community-based system of services for children and youth with special health care needs.
      • Perrin J.M.
      Prevention and chronic health conditions among children and adolescents.
      Multiple studies have evaluated the impact of providing health insurance to children. During the 1980s, the RAND Health Insurance Experiment demonstrated that children who had health insurance received better quality of care for many measures such as preventive services.
      • Lohr K.N.
      • Brook R.H.
      • Kamberg C.J.
      • et al.
      Use of medical care in the RAND Health Insurance Experiment.
      Studies during the 1980s and 1990s demonstrated that provision of Medicaid to uninsured children living in poverty improved their receipt of ambulatory care.
      Committee on Consequences of Uninsurance Institute of Medicine
      Health Insurance Is a Family Matter.
      During the 1990s, studies in Florida,
      • Shenkman E.
      • Pendergast J.
      • Wegener D.H.
      • et al.
      Children's health care use in the Healthy Kids Program.
      New York,
      • Szilagyi P.G.
      • Zwanziger J.
      • Rodewald L.E.
      • et al.
      Evaluation of a state health insurance program for low-income children: implications for state child health insurance programs.
      • Holl J.L.
      • Szilagyi P.G.
      • Rodewald L.E.
      • et al.
      Evaluation of New York State's Child Health Plus: access, utilization, quality of health care, and health status.
      and Pennsylvania,
      • Lave J.R.
      • Keane C.R.
      • Lin C.J.
      • et al.
      Impact of a children's health insurance program on newly enrolled children.
      found that enrollees in state prototype programs that offered health insurance for low-income children who did not qualify for Medicaid had measurable improvements in access, utilization, and quality measures.
      This body of evidence was helpful in the passage of SCHIP, which was enacted in 1997 as Title XXI of the Social Security Act and authorized for 10 years to provide health insurance to low-income children who were not eligible for Medicaid. States implemented SCHIP through private programs, Medicaid expansions, or a combination, and within several years SCHIP covered more than 4 million children per year, with families paying premiums on a sliding scale matched to their income levels. Studies evaluating SCHIP have found that children who enroll in SCHIP experience improved access to care, more appropriate use of health care (eg, better continuity of primary care), and enhanced quality of care.
      • Slifkin R.T.
      • Freeman V.A.
      • Silberman P.
      Effect of the North Carolina State Children's Health Insurance Program on beneficiary access to care.
      • Youngblade L.M.
      • Col J.
      • Shenkman E.A.
      Health care use and charges for adolescents enrolled in a title XXI program.
      • Szilagyi P.G.
      • Dick A.W.
      • Klein J.D.
      • et al.
      Improved asthma care after enrollment in the State Children's Health Insurance Program in New York.
      • Szilagyi P.G.
      • Dick A.W.
      • Klein J.D.
      • et al.
      Improved access and quality of care after enrollment in the New York State Children's Health Insurance Program (SCHIP).
      • Shone L.P.
      • Dick A.W.
      • Klein J.D.
      • et al.
      Reduction in racial and ethnic disparities after enrollment in the State Children's Health Insurance Program.
      • Kempe A.
      • Beaty B.L.
      • Crane L.A.
      • et al.
      Changes in access, utilization, and quality of care after enrollment into a state child health insurance plan.
      Studies also show improved outcomes among children with asthma
      • Szilagyi P.G.
      • Dick A.W.
      • Klein J.D.
      • et al.
      Improved asthma care after enrollment in the State Children's Health Insurance Program in New York.
      and other children with special health care needs,
      • Szilagyi P.G.
      • Shone L.P.
      • Klein J.D.
      • et al.
      Improved health care among children with special health care needs after enrollment into the State Children's Health Insurance Program.
      and among specific age groups such as adolescents.
      • Klein J.D.
      • Shone L.P.
      • Szilagyi P.G.
      • et al.
      Impact of the State Children's Health Insurance Program on adolescents in New York.
      One study even noted reductions in preexisting health care disparities following enrollment in SCHIP.
      • Shone L.P.
      • Dick A.W.
      • Klein J.D.
      • et al.
      Reduction in racial and ethnic disparities after enrollment in the State Children's Health Insurance Program.
      Findings from these studies add critical evidence to the debate on SCHIP reauthorization.
      Despite the relatively large body of evidence of the benefit of SCHIP, its reauthorization in 2007 stalled.
      • Iglehart J.K.
      The fate of SCHIP—surrogate marker for health care ideology?.
      Two fundamental questions were hotly debated.
      • Iglehart J.K.
      The battle over SCHIP.
      The first was reauthorization of SCHIP for the currently eligible child population, which varies by state but generally consists of children living in families whose income is above the Medicaid eligibility level but below 200% of the federal poverty level (FPL), which amounts to $42,400 in 2008 for a family of 4 in the 48 contiguous United States. The second question involved potential expansion of eligibility to 300% or even 400% of the FPL. Both proposals were vetoed by the Bush administration, and SCHIP was temporarily extended with its prior design and eligibility in place. The Obama administration and the 111th Congress are expected to consider SCHIP reauthorization and expansion, as well as the issue of child health insurance for all children.
      Regarding the possibility of SCHIP expansion to cover children with families with higher income, there is little direct evidence because studies have rarely evaluated the impact of health insurance on children who are between 200% and 400% of the FPL. However, research has shed light on 2 issues related to SCHIP expansion. First, a recent study found that uninsured children living in families between 200% to 400% of FPL were twice as likely as insured children in the same income levels to lack medical visits or prescriptions during a year and substantially more likely than insured children to lack preventive care. These uninsured children between 200% to 400% FPL resembled uninsured children below 200% FPL in their level of foregone care.
      • Shone L.P.
      • Klein J.D.
      • Blumkin A.K.
      • Szilagyi P.G.
      Upper income limit for SCHIP and forgone care among uninsured US children.
      This finding suggests that expansion of SCHIP to cover children between 200% to 400% FPL has the potential to significantly improve their health care as well and supports expansion of SCHIP to at least 400% of the FPL.
      The second issue related to SCHIP expansion is that parents of children who would find themselves newly in the SCHIP income eligibility range might drop (or might be encouraged by employers to drop) private insurance to enroll in SCHIP—a phenomenon known as “crowd out.” Indeed, employers might be more likely to stop sponsoring insurance if they knew that a larger percentage of their workforce could qualify for SCHIP. This concern was raised when SCHIP was originally authorized, and some states instituted provisions to prevent crowd out. However, a recent study found that in New York State, the incidence of crowd out was extremely low,
      • Shone L.P.
      • Lantz P.M.
      • Dick A.W.
      • et al.
      Crowd-out in the State Children's Health Insurance Program (SCHIP): incidence, enrollee characteristics and experiences, and potential impact on New York's SCHIP.
      and other studies
      • Kenney G.
      • Chang D.I.
      The State Children's Health Insurance Program: successes, shortcomings, and challenges.
      have suggested that few SCHIP enrollees switch directly from private insurance to SCHIP. Although some crowd out does exist, it may also result in improved coverage for the children who switch to SCHIP. It turns out that the majority of families who enroll in Medicaid or SCHIP have either had a major life event (eg, job loss or divorce) that reduced their income and made private insurance unavailable or are working families unable to afford private insurance. These studies counter arguments that children do not benefit from SCHIP, and that SCHIP expansion will threaten private insurance.
      The above-mentioned studies provide strong evidence for the benefit of health insurance for children below 200% FPL and also provide some evidence for the potential benefit of SCHIP expansion to children up to 400% of the FPL. We hope this body of evidence will be used in the likely upcoming debate about SCHIP reauthorization and expansion.
      The second major policy option regarding child health insurance involves the Obama proposal during the 2008 presidential campaign to provide health insurance to all children. It is reasonable to ask how far this policy option would extend beyond a SCHIP expansion to 400% FPL. This question has to do with 2 groups of children: those living in families above 400% FPL and those children who are currently eligible for public health insurance who remain uninsured.
      Regarding the potential benefit of health insurance to children above 400% FPL, few studies have addressed this population specifically. This group of children makes up only 9% of all uninsured children, because 91% of uninsured children are from families below 400% FPL.

      Henry J Kaiser Family Foundation. Health coverage of children: the role of Medicaid and SCHIP. Available at: http://www.kff.org/uninsured/upload/7698.pdf. Accessed November 23, 2008.

      Their level of foregone care is lower than among children below 400% FPL.
      • Shone L.P.
      • Lantz P.M.
      • Dick A.W.
      • et al.
      Crowd-out in the State Children's Health Insurance Program (SCHIP): incidence, enrollee characteristics and experiences, and potential impact on New York's SCHIP.
      However, uninsured children above 400% FPL are nonetheless twice as likely to lack any health care visits or prescriptions compared with insured children above 400% FPL.
      Altogether, 88% of all children in the United States are already covered by private health insurance or public health insurance,

      U.S. Census Bureau. Health Insurance Coverage: 2006. Available at: http://www.census.gov/hhes/www/hlthins/hlthin06/hlth06asc.html. Accessed November 23, 2008.

      leaving 12% of children (11 million children) without health insurance. Multiple studies have demonstrated that about two thirds of these uninsured children are already eligible for either Medicaid or SCHIP.

      Henry J Kaiser Family Foundation. Health coverage of children: the role of Medicaid and SCHIP. Available at: http://www.kff.org/uninsured/upload/7698.pdf. Accessed November 23, 2008.

      The reasons for their lack of enrollment include administrative barriers, family issues, attitudes about insurance, and inability to maneuver through the complicated health care system to complete enrollment.

      Kenney G, Haley J. Why aren't more uninsured children enrolled in Medicaid or SCHIP? Available at: http://www.urban.org/UploadedPDF/310217_ANF_B35.pdf. Accessed November 23, 2008.

      A child health insurance program that covered all children would need to ensure that these barriers are overcome.
      The new administration and Congress will certainly be looking at the potential cost of insuring the 11 million uninsured children. Studies demonstrate that the health care costs of children are about one tenth the health care costs of adults.

      Center for Medicare and Medicaid Services. National health expenditure accounts: 2006 highlights. Available at: http://www.cms.hhs.gov/NationalHealthExpendData/downloads/highlights.pdf. Accessed November 23, 2008.

      National Center for Children in Poverty. Public health insurance for children. Available at: http://www.nccp.org/profiles/index_32.html. Accessed November 23, 2008.

      Nevertheless, there would certainly be costs associated with either SCHIP expansion or of provision of health insurance to all children. The costs of the latter would be influenced by associated incentives/penalties to limit a substantial decline in the number of children who receive private insurance through their parents’ employers. It will be important for future research to assess both the costs and the gains of expanding child health insurance.
      Finally, it is important to point out that scientific evidence has also demonstrated the limits to health insurance. Studies have demonstrated that health insurance does not guarantee receipt of high-quality care.
      • Szilagyi P.G.
      • Schor E.L.
      The health of children.
      Provision of health insurance to children will not, by itself, be enough to optimize their health outcomes. Indeed, a series of steps is necessary to achieve optimal health outcomes in any population.
      • Eisenberg J.M.
      • Power E.J.
      Transforming insurance coverage into quality health care: voltage drops from potential to delivered quality.
      • Chung P.J.
      • Schuster M.A.
      Access and quality in child health services: voltage drops.
      Health insurance is a critical first step, but by itself is not sufficient.
      • Genel M.
      • McCaffree M.A.
      • Hendricks K.
      • et al.
      A National Agenda for America's Children and Adolescents in 2008: recommendations from the 15th Annual Public Policy Plenary Symposium, annual meeting of the Pediatric Academic Societies, May 3, 2008.
      Further refinements are needed in each step from improved access, to optimal and efficient utilization of health care, to optimal receipt of health and related services, to combining effective health care with healthy behaviors and child-oriented environmental, community, and public health improvements.
      We hope that the Obama administration and the 111th Congress, working together with state and local leaders, will make children a focal point. The evidence is compelling with respect to health insurance for children. Uninsured children experience greater risk for multiple adverse consequences during childhood and later in life. Provision of health insurance improves children's health care and health outcomes. SCHIP has been extremely beneficial to children, and expansion of SCHIP is likely to reap similar benefits. Provision of health insurance for all children would improve the health of millions of uninsured children, most of whom are already eligible for existing public health insurance programs. A renewed focus on children and families in the United States can start with reauthorization of SCHIP, progress to expansion of SCHIP, and finally move on to a guarantee of health insurance for all children.

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