The monthly transitions reported in Table 8 show that about 8 percent of the children who were uninsured at any point in time in FY93 or FY94 became insured in the next month while Table 7 indicates that 36 percent of the children who were uninsured in October 1992 were insured 11 months later and 46 percent were insured 23 months later. Similarly, the monthly transitions reported in Table 10 show that, on average, about 4 percent of the children enrolled in Medicaid at any time in the two-year period left the program the next month while Table 7 shows that about 20 percent exited over the course of 11 months and 26 percent over 23 months. In each case the change over 11 or 23 months is considerably less than we would see if each cohort of children who were uninsured or enrolled in Medicaid in a given month experienced the same exit rates month after month.9 Here we examine the cumulative effect of monthly transitions on children who started out in a particular state of health insurance coverage in October 1992. For each of three initial statuses-- uninsurance, Medicaid-eligible uninsurance, and Medicaid enrollment--we present estimates of the distribution of children by coverage status in each of the next 23 months. Over time, then, we see what fraction of the original population of, say, uninsured children is still uninsured in each of the next 23 months and what fraction has moved to either Medicaid, employer-sponsored insurance, or other insurance.
Table 12 presents the distribution of children who were uninsured in October 1992 by their health insurance coverage in each of the next 23 months.(10) As we saw in Table 8, about 9 percent leave the uninsured population in the first month. This exit rate begins declining immediately, dropping to between 2 and 3 percent within four months and to about 1 percent within another four months. By the final months of FY94, the percentage remaining uninsured is declining by less than one percentage point per month (or less than 2 percent of those remaining uninsured). Initially, children who leave uninsurance are about equally likely to enroll in Medicaid and obtain employer- sponsored coverage, but after two months those children who have left uninsurance are increasingly more likely to be covered by employer-sponsored coverage than by Medicaid. For some of the children who end up with employer-sponsored coverage, the path from uninsurance to employer- sponsored coverage may pass through Medicaid. That is, children may leave uninsurance by obtaining Medicaid coverage but then move from Medicaid to employer-sponsored coverage at a later date. We cannot tell from this table the paths that children take. On the other hand, it is quite clear from these data that as long as 23 months after children have left uninsurance, Medicaid remains a much more important source of coverage than it is among all insured children. In September 1994, children who were uninsured in October 1992 are less than one-and-a-half times
as likely to have employer-sponsored coverage as Medicaid (24.8 percent versus 16.8 percent of all children who were uninsured in October 1992). Among all insured children in September 1994 who were under 19 and part of the SIPP universe in October 1992, the number covered by employer- sponsored plans is nearly four times the number covered by Medicaid (45.5 million versus 12.3 million).
b. Medicaid-eligible Uninsurance
Table 13 reports the distribution of children who were uninsured and eligible for Medicaid in October 1992 by their health insurance coverage in each of the next 23 months. Within one month, more than 20 percent of the children who were Medicaid-eligible and uninsured had changed to another coverage status. About 7 percent remained uninsured but were no longer eligible for Medicaid while a comparable percentage had enrolled in Medicaid. Just over 5 percent had employer-sponsored coverage while only .2 percent had other coverage. About .6 percent had left the population. After two months, the percentage remaining Medicaid-eligible and uninsured had dropped to under 65 percent, and within seven or eight months it had reached 40 percent. After 23 months, only 26 percent of the original population of children who were Medicaid-eligible and uninsured at the outset remained part of that population. Note, however, that 21 percent of the original population were still uninsured. Comparing Tables 13 and 12, we see that the Medicaid- eligible uninsured were only slightly more likely to have left the state of uninsurance than all uninsured: 52.5 percent versus 48.5 percent. Even so, Medicaid remained the dominant source of coverage among those who left uninsurance, accounting for 27 percent of the original population compared to 18 percent with employer-sponsored coverage. This represents a reversal of the relative importance of these two sources of coverage among all children who were uninsured in October 1992.
To highlight the impact of Medicaid eligibility, Table 14 presents the distribution of children who were uninsured but not eligible for Medicaid in October 1992 by their health insurance coverage in each of the next 23 months. These children left uninsurance somewhat more slowly than those who were initially eligible for Medicaid. After one month, 86 percent remained uninsured and not eligible for Medicaid while another 6.5 percent had gained Medicaid eligibility but remained uninsured. About 3 percent had enrolled in Medicaid and another 3 percent had obtained employer- sponsored coverage. These figures imply a Medicaid participation rate of about one third for children who are uninsured and newly eligible for Medicaid. Within a few months the Medicaid eligible are evenly split between those participating and those not participating in Medicaid. Toward the end of the 23-month period, the Medicaid participants are between one-and-a-half and two times the number of Medicaid-eligible nonparticipants, implying a Medicaid participation rate in excess of 60 percent.
Within four months of October 1992, children who have left the uninsured population are twice as likely to be covered by an employer-sponsored plan as Medicaid. This relative importance of the two sources of coverage among children who started out as uninsured and not eligible for Medicaid persists through September 1994.
c. Medicaid Enrollment
Table 15 reports the distribution of children enrolled in Medicaid in October 1992 by their health insurance coverage in each of the next 23 months. Children without health insurance coverage are apportioned between those who are eligible for Medicaid and those who are not. As reported in Table 10, about 3 to 4 percent of the children enrolled in Medicaid at any point in time leave the program within the next month. Table 15 shows that this rate of departures from Medicaid persists over as many as four months before slowing down. By the fourth month, 14 percent of the original Medicaid population has exited, with 5.5 percent picking up employer-sponsored coverage, .2 percent acquiring other coverage and an equal number leaving the survey population. Altogether 8 percent have become uninsured, with nearly 5 percent remaining Medicaid eligible. This latter percentage changes only marginally thereafter. The fraction of all October 1992 Medicaid participants classified as uninsured but still eligible for Medicaid never rises above 6.0 percent whereas the proportion who are uninsured but not eligible for Medicaid continues to ascend, gradually, reaching 8 percent by September 1994.
After four months, the proportion of October 1992 Medicaid children who are covered by employer-sponsored insurance stands at 5.5 percent. This proportion rises only another four percentage points over the next 19 months, reaching 9.6 percent by September 1994. In sum, the picture presented by Table 15 is one of very slow change in the population of children who start FY93 enrolled in Medicaid. Two years later nearly three-quarters of these children are still enrolled in Medicaid, with only 11 percent having moved to some other type of coverage and nearly 14 percent having become uninsured. More than a third of the uninsured appear to have retained their Medicaid eligibility. While this is puzzling, it is important to keep in perspective the small size of this group. At 5.5 percent of those who were enrolled in Medicaid in October 1992 they number 692,000, which makes them barely more than one quarter of the 2.6 million children who were uninsured and Medicaid-eligible in September 1994.