Health Insurance for Children:

Declines in Employment-Based Coverage Leave Millions Uninsured; State and Private Programs Offer New Approaches

T-HEHS-97-105: Published: Apr 8, 1997. Publicly Released: Apr 8, 1997.

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GAO discussed recent changes in health insurance coverage and the effect of these changes on children, focusing on: (1) recent trends in children's health insurance coverage, particularly in employment-based coverage; (2) the increasing role of Medicaid in insuring children and possible interactions with private insurance; and (3) some small-scale but innovative state and private efforts to provide coverage for uninsured children.

GAO noted that: (1) while most children have health insurance, almost 10 million children lack insurance; (2) between 1989 and 1995, the percentage of children with private coverage declined significantly, part of an overall decline in coverage of dependents through family health insurance policies; (3) increases in the cost of providing health insurance have prompted many employers to take steps that discourage or limit dependent coverage, such as raising premiums or providing incentive payments to employees who refuse family coverage; (4) this erosion in employer support for health insurance has contributed to the increasing number of children in working families without private health insurance; (5) as these reductions in private coverage were occurring, Medicaid eligibility for children expanded; (6) these expansions helped to cushion the effect of the loss of private coverage, but they also may have contributed to some further reductions in private coverage; (7) families respond to the availability of public coverage differently; (8) while some families may have been induced to drop private coverage to gain Medicaid for the children, others may not have taken advantage of the program; (9) indeed, almost 3 million Medicaid-eligible children remain uninsured; (10) a number of states, in conjunction with local governments, and private entities have developed children's insurance programs that differ significantly from Medicaid; (11) some of these public/private efforts may prove instructive in developing future strategies for insuring children; (12) for example, by targeting their outreach efforts, the programs have been able to identify uninsured children, some of whom are eligible for Medicaid; (13) in addition, the programs have developed service packages based on preventive care and required parents to assume some of the insurance cost through premium contributions and copayments for specific services; and (14) such strategies have helped to stretch program dollars and provide needed health care to more children.

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