Looking Under the ACA Hood to Check on How Uninsured Children are Doing

Recently, CCF teamed up with the researchers at the Urban Institute to take a first look at how the Affordable Care Act is impacting the rate of uninsured children. The high level data indicates that, so far, there has been no detectable change nationally, although children’s uninsured rates remains at historically low levels. But state Medicaid and CHIP programs come in different makes and models. So we thought we’d kick the tires and look under the hood to see what’s going on. The welcome mat lacks traction in 23 states that have not expanded Medicaid.  Coverage expansions typically turbo-boost enrollment of uninsured children who were already eligible through increased outreach and awareness of coverage options. But four of the six states with the largest numbers of uninsured children (the majority of whom are eligible but not enrolled) have not yet expanded Medicaid beyond the very poorest parents. The lack of Medicaid expansion in these states is stalling momentum on the children’s coverage front.

Most Medicaid expansion states were already firing on all pistons. The majority of states (21 of 27) that expanded Medicaid have higher than national rates of eligible uninsured children enrolled in Medicaid or CHIP with a median participation rate of over 90 percent. Perhaps even more telling is that the median uninsured rate for children in these states is a low 4.5 percent. A combination of high participation of eligible children and a low uninsured rate means expansion states were already in the lead.

Building a new fleet of Medicaid eligibility systems. All states are taking advantage of substantial federal funding to replace their model T computer systems, some of which have been in use for more than 30 years. Under the best of circumstances, implementing a new high-functioning IT system is more like crafting a custom-designed racing machine rather than buying a new car off the lot. Doing so with a limited pit crew given the recession’s depletion of state human resources has proven exceptionally difficult.

Getting the MAGI eligibility engine humming. The ACA brought about the most transformative changes to how Medicaid and CHIP programs operate in the history of these programs. Re-engineering your business practices while building new IT systems is doubly challenging.  And while ACA enactment might have been the call to “start your engines,” states didn’t get the green flag until federal regulations and guidance in implementing MAGI eligibility and new verification procedures were finalized many months later. Ultimately, realizing the vision of real-time, electronically verified eligibility will provide additional horsepower for enrollment and retention.

Backlogsof marketplace accounts transfers choked the systems. Creating consistent, error-free functionality to electronically transfer data between marketplaces and Medicaid/CHIP agencies proved especially difficult. A number of states continue to work through application backlogs that could boost enrollment in the near future and eventually free up resources to tune-up other processes.

Going flat at renewal. Annual eligibility renewals impact enrollment like a slow leak in a tire although eligible people who lose coverage at renewal usually reapply within a few weeks or months. In the new world of MAGI, at least the first round of renewals will be more complicated as states gather new eligibility data, including tax-filing status and access to minimum essential coverage. Although two-thirds of states delayed renewals to gain extra time, the impact of implementing MAGI renewals might be enough to make some tires go flat, at least temporarily.

Well-oiled states are making progress. There is good news. Colorado, Arkansas, and other states are reporting gains in children’s coverage. And Florida, which has yet to expand Medicaid, has seen a surge in children’s enrollment that many attribute in part to transitioning CHIP kids between 100 – 133% FPL to Medicaid, and thereby eliminating premiums which are a known barrier to coverage. But if the national uninsurance rate for children is flat and some states are making gains, this could mean that we are losing ground in other states where implementation challenges have made it difficult to enroll and retain coverage. For the better part of two decades, we’ve gained mileage as states pioneered improvements in children’s coverage. Accelerating the adoption of the most efficient and effective practices across the nation by making the system more aerodynamic is a central goal of the ACA.

Running under the caution flag means the race will take more time. The race to the finish can’t be completed in record time when systems aren’t operating at optimal speed. When the ACA passed, many people wondered why implementation should take four years; looking in the rearview mirror puts the complexity of this transformation in perspective.

Ultimately, we are optimistic that further gains can and will be made in covering the nation’s children. Dale Earnhardt once said, “The winner is not the one with the fastest car, it’s the one who refuses to lose.” We have found a way to cover 99 percent of seniors and we will continue to drive home the need to do no less for children. But to stay on track, we’ll need not only well-tuned engines but also a full tank of gas. While the checkered flag may be in sight, extending CHIP funding beyond 2015 is critical to getting over the finish line.

Written by Tricia Brooks, Georgetown Center for Children and Families. Cross-posted from the Say Ahhh! Health Policy Blog.