Study Finds Shifts in Insurance Coverage of Low-Income Children

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A study conducted by the Center for Studying Health System Change (HSC) finds no net change in the uninsurance rate for low-income children but does find a shift from private to public insurance coverage. HSC evaluated two rounds of its Household Survey, a nationally representative telephone survey of nearly 33,000 families and 60,000 individuals, for the periods 1996-97 and 1998-99. It found that public insurance coverage increased between the periods from 29% to 33%, while private coverage fell from 47% to 42%. HSC also found that the uninsurance rate for low-income parents increased from 31% to 35% between the periods.

The decline in private coverage only affected low-income families with children, not children in families with incomes over 200% of the federal poverty level or low-income adults without children. The drop in private coverage for low-income children is attributed to 1) fewer parents being offered family coverage through their employers, and 2) fewer parents enrolling in, or taking up, that coverage when it is offered. Also, increases in health insurance premiums may have affected the declines in private insurance coverage, especially in small firms that employ many low-income parents.

Although the authors did not specifically examine the substitution of private coverage with public insurance (known as "crowd out"), they did not find large numbers of children moving directly from private to public insurance. For instance, in 1998-99, only 2% of low-income children enrolled in public programs had switched directly from private insurance in the previous year, and the rate of children switching in such a manner did not increase as compared to the preceding 2 years. Instead, most new enrollees in public coverage were previously uninsured.

The report notes that the issue of movement from private to public coverage is complicated, and the key question is "whether the decrease in private insurance coverage ... was a result of expanded eligibility for public programs ... or whether it occurred independently of public coverage expansions." Furthermore, the report states that the study's time span may not address the complexities of this issue because, for example, some children may be uninsured but may then later gain coverage.

Center for Studying Health System Change. 2000. Recent trends in children's health insurance coverage: No gains for low-income children. Available at http://www.hschange.com/issuebriefs/issue29.html. A press release is also available at http://www.hschange.com/releases/kids.htm.

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MCH Alert. 2001. Arlington, VA: National Center for Education in Maternal and Child Health. http://www.ncemch.org/alert.