HEALTH INSURANCE

Medical Coverage for America: Past and Present

Health insurance in the United States originated around 1850 as voluntary programs through cooperative mutual benefit and fraternal beneficiary associations, as well as through some commercial companies, industries, and labor unions that offered limited coverage. President Theodore Roosevelt instigated the idea for government health insurance in the early 1900s, but his concept never materialized because of the public's fear of socialized medicine.

Over time, many plans were developed by societies of practicing physicians, but it was the community-sponsored, nonprofit service plans based on contracts with hospitals and subscribers that drew the greatest enrollment. Under the name "Blue Cross and Blue Shield," these plans extended coverage to dependents while excluding coverage of accidents and diseases covered by workers' compensation laws, but their limitations—such as excluding those who could not afford the coverage and senior citizens—led to their downfall and subsequent restructuring in the mid-1990s.

In 1965 the federal government created two national health insurance programs: Medicare for the elderly and Medicaid for the poor. The Health Maintenance Organization (HMO) Act was passed by Congress in 1973 to provide low-cost alternatives to hospitals and private doctors through employer-based plans.

While there are many health insurance options available in the country, the United States remains the only Western industrial nation without some form of comprehensive national health insurance. According to the U.S. Bureau of the Census, 15.5 percent of the population was without health insurance coverage in 1999, and 13.9 percent of the uninsured were children (under age eighteen). Even though the uninsured rate for children decreased between 1998 and 1999, poor children continued to represent the highest number without health insurance coverage, making up 28.2 percent of all uninsured children in 1999.

Providing Children with Health Insurance

Health insurance plays a critical role in ensuring that children access the health care they need—and without it, the health status of children and the well-being of families is jeopardized. Studies have shown that lack of health insurance affects children in all aspects of their lives, not just their health. Those without primary or preventive care generally use inappropriate, more expensive services and have more serious medical problems. Their neglected health problems cause them to miss school and fall behind in their studies, possibly affecting future educational and employment opportunities, and may prevent them from achieving their full potential.

Because of the serious consequences of the lack of health insurance, providing children with medical care is a constant area of concern for the U.S. government. There are three major sources of health insurance for children in the United States: employment-based or privately purchased; Medicaid; and the State Children's Health Insurance Program.

According to the Census Bureau, 68.9 percent of children were covered by an employment-based or privately purchased health insurance plan in 1999. Privately purchased plans can be bought through numerous health insurance companies. While full-time employees may receive the option of health-care coverage for themselves and their families through pay-deduction contributions, this coverage is often not guaranteed.

In 1999, 20 percent of children were covered by Medicaid. Since its beginning in 1965, Medicaid has been instrumental in financing health-care costs for the poor. Medicaid is a jointly funded, federal-state health insurance program for certain low-income and needy people and is administered by the Health Care Financing Administration. It covers approximately 36 million individuals including children, the aged, people who are blind or disabled, and people who are eligible to receive federally assisted income maintenance.

While Medicaid offers a great deal of health insurance coverage to children, the Balanced Budget Act of 1997 took the government's efforts one step further by allowing states to expand Medicaid eligibility with an enhanced federal match. Once passed, the Balanced Budget Act of 1997 restored Medicaid to those who previously lost the entitlement after passage of the Personal Responsibility and Work Opportunity Act of 1996. It also granted states greater flexibility when determining eligibility.

A major provision of the Balanced Budget Act of 1997 was the State Children's Health Insurance Program (SCHIP), also known as Title XXI, which allowed for more than $40 billion to be given to states over a ten-year period. This stipulation allowed states to implement Medicaid eligibility expansions and provisions to ensure enrollment of all children qualified for Medicaid under federal legislation. The passage of Title XXI helped form health insurance programs in each state for infants, children, and teens. For little or no cost, these state insurance programs pay for doctor visits, prescription medicines, hospitalizations, and much more. Although each state has different eligibility rules, most states insure children who are eighteen years or younger and whose families earn up to $34,100 a year (for a family of four).

SCHIP has been widely supported, and in 1999 the American Academy of Pediatrics (AAP) recommended that states implement the following to ensure that all children who are eligible for Medicaid are enrolled in the program:

• immediately extend Medicaid coverage to all children at or below the federal poverty level who are younger than nineteen years old to take advantage of the enhanced federal match offered under Title XXI;
• ensure that Medicaid-eligible children who lose cash benefits under the Supplement Security come program as a result of welfare reform remain enrolled in Medicaid;
• eliminate asset testing to determine Medicaid eligibility;
• guarantee twelve months of continuous Medicaid eligibility for children younger than nineteen years;
• adopt presumptive Medicaid eligibility options for children younger than nineteen years, similar to the option available for pregnant women;
• ensure that a redetermination of eligibility be made before disenrolling any children from Medicaid because of changes in their eligibility for cash assistance under the Temporary Assistance for Needy Families program; and
• ensure that children who are removed from their homes by the state are immediately enrolled in Medicaid.

The AAP and other national organizations strongly support the expansion of Medicaid because of the countless children who have yet to benefit from it. The AAP estimated that in 1997, approximately
4.5 million uninsured children were eligible for Medicaid but were not enrolled. Another 4.6 million children who were privately insured were also eligible for Medicaid as a supplement to their private insurance but were not enrolled.

The Children Left Behind

While Medicaid's benefits seem endless, many may question why so many children do not have the health insurance that they so desperately need. When Medicaid was separated from welfare during the mid- 1980s the hope was that children would benefit from major eligibility expansions. But state eligibility procedures have been shaped over time by federal rules that penalize states for enrolling ineligible beneficiaries, and the AAP indicates that there has been silence about the millions of eligible beneficiaries who are not enrolled. Beginning with the passage of Title XXI, the AAP has put a call out to pediatricians, otherhealth-care professionals, and child advocates to assist state Medicaid agencies in providing outreach to families whose children are uninsured or underinsured.

In the United States there are specific groups of children that are at an especially high risk for being without health insurance. A national survey in 1998 found that teens, children of color, and children in single-parent families were at a particularly high risk for being uninsured. Other research also indicated that the educational status of adult family members is a good predictor of a child's insurance status. For instance, parents who have not completed high school are likely to work in unskilled jobs lacking health insurance benefits, and therefore their children are most likely to be without health coverage. The Census Bureau reported that black children had a higher rate of Medicaid coverage in 1999 than children of any other racial or ethnic group. The rate for black children was 36.2 percent, compared with 30.8 percent for Hispanic children, 16.7 percent for Asian and Pacific Islander children, and 13.2 percent for white non-Hispanic children.

In order to increase enrollment in Medicaid, President Clinton in 1998 launched the Children's Health Insurance Outreach Initiative, which gave the states additional funds and flexibility to find and enroll hard-to-reach children. President Clinton's initiative also challenged the public and private sectors to educate families about Medicaid and SCHIP. An additional step taken by the Clinton administration was the nationwide "Insure Kids Now" campaign in 1999 to enroll eligible children in Medicaid and SCHIP.

While Title XXI is a significant progression for U.S. socikal policy by offering a way to reduce the number of children who are uninsured, there are many variables that must coincide for the program to be successful. The biggest issues that remain are: reaching those who are eligible for Medicaid and educating families about the importance of health insurance for their children.

See also: STATE CHILDREN'S HEALTH INSURANCE PROGRAM

Bibliography

American Academy of Pediatrics. "Implementation Principles and Strategies for the State Children's Health Insurance Program." Pediatrics 107 (2001):1214-1220.

American Academy of Pediatrics, Committee on Child Health Financing. "Medicaid Policy Statement."Pediatrics 104 (1999):344-347.

Health Care Financing Administration [web site]. Boston, 2001.Available from http://www.hcfa.gov; INTERNET.

Perloff, Janet D. "Insuring the Children: Obstacles and Opportunities." Families in Society: The Journal of Contemporary Human Services (September 1999):516.

U.S. Bureau of the Census. "Health Insurance Coverage: Consumer Income." Washington, DC: U.S. Bureau of the Census, 1999.

Beth A. Kapes