Using data from the Survey of Income and Program Participation (SIPP), this report examines the characteristics of children under the age of 19 by their health insurance status. The report presents findings on broad types of health insurance coverage while focusing in particular on Medicaid eligibility and participation and on children who lack coverage altogether--the uninsured. We include the following demographic characteristics: age, race and Hispanic origin, family composition, metropolitan versus nonmetropolitan residence, and region. We also include three socioeconomic characteristics: family income relative to the federal poverty level, parents' employment, and parents' education.
Section A presents findings with respect to health insurance coverage at a point in time. Section B examines the characteristics of children by Medicaid eligibility and participation. Section C looks at the lack of insurance over time. Section D presents estimates of the annual incidence and duration of uninsurance, Medicaid eligibility, and Medicaid participation by single year of age, utilizing an approach that yields the cleanest possible age differentials. Finally, Section E summarizes our major findings and conclusions.
A. Insurance Coverage at a Point in Time
In this section we examine the characteristics of children by their insurance coverage at a point in time, utilizing a measure of coverage that differentiates among employer-sponsored insurance, Medicaid, other public or privately purchased insurance, and the lack of coverage. We begin by comparing the insurance coverage of children with what was reported for their parents. We then examine how insurance coverage varies by children's demographic and socioeconomic characteristics.
B. Medicaid Eligibility and Participation
The number of uninsured children who appear to be eligible for Medicaid, according to survey estimates, has raised concerns about the adequacy of Medicaid outreach. In Appendix B we presented findings from the 1992 SIPP panel that suggest that: (1) most uninsured children who become eligible for Medicaid remain eligible for very short periods of time, (2) more than two-thirds of all spells of Medicaid-eligible uninsurance are preceded or followed by periods of uninsurance without Medicaid eligibility, and (3) about one-third of spells of Medicaid-eligible uninsurance are preceded and followed by spells of uninsurance without Medicaid eligibility. The often transitory nature of Medicaid eligibility during spells of uninsurance may help to explain why many uninsured children who appear to be eligible for Medicaid do not enroll. In addition, we found that more than 40 percent of spells of Medicaid-eligible uninsurance were preceded or followed by Medicaid enrollment, and perhaps one fifth of such spells were preceded and followed by Medicaid enrollment. In other words, a significant share of Medicaid-eligible uninsured children appear to have initiated their spells of uninsurance by leaving Medicaid or to have ended their spells of Medicaid-eligible uninsurance by enrolling in Medicaid. For the first group, the key policy question is not why these children have not enrolled in Medicaid but, rather, why they left Medicaid. For the second group the key policy question is not why have these children not enrolled in Medicaid but why have they not enrolled sooner. Thus our analysis of the dynamics of uninsurance, Medicaid eligibility, and Medicaid participation suggests that inferences about the inadequacy of Medicaid outreach from the observation that three or four million uninsured children appear to be eligible for Medicaid at any point in time are overly simplistic and may be only partially supported by a closer examination of this population--particularly before and after the period of Medicaid eligibility. In the first subsection below we examine the demographic and socioeconomic characteristics of uninsured children who appear to be eligible for Medicaid, and in the second subsection we look at Medicaid participation rates among all eligible children by their demographic and socioeconomic characteristics.
C. Lack of Insurance over Time
From looking at differentials in health insurance coverage at a point in time we turn now to differentials in the lack of health insurance coverage over time. First we compare children who were uninsured at the end of a year with those who were ever uninsured during the year. Next we look at differentials in the duration of all new spells of uninsurance that began during FY93, followed by new spells of uninsurance coupled with Medicaid eligibility. We close by examining differentials in the duration of spells that were active at the end of FY93 and comparing these to differentials in the duration of new spells that began during the year.
D. Annual Incidence and Duration of Uninsurance, Medicaid Eligibility, and Medicaid Participation by Age
When we measure age at a point in time but measure behavior over a period of time, some of the behavior that we observe may have happened at an earlier or later age. If the behavior in question is affected by crossing particular age boundaries--as is Medicaid participation--then the relationship that we observe between age and the measured behavior may be attenuated by defining age at a point in time. Tables 24 through 27 are based on a different approach to assigning age to behavior measured over time. These tables examine the experience of uninsurance, Medicaid participation, and both Medicaid-eligible and Medicaid-ineligible periods of uninsurance through the 12 months that a child spends at a given single year of age. To create these tables, we identified children by their age in September 1993 and then looked forward and backward to determine the 12-month period that each child spent at the defined age.11 We then counted the number of months over this 12-month period that each child was observed in each of four statuses: uninsured (Table 24), uninsured but eligible for Medicaid (Table 25), uninsured but not eligible for Medicaid (Table 26), and enrolled in Medicaid (Table 27). For each of these four statuses we tabulated by single year of age:
- The proportion of children who experienced any months in that status during the year
- The mean number of months in that status among those who spent 1 to 12 months
- The proportion who were in that status for all 12 months, expressed as
(1) a proportion of children who spent any time in that status during the year,
(2) a proportion of all children
These tabulations give us a clearer picture of the age-specific patterns of uninsurance and Medicaid participation than we obtain when we classify children's behavior over the course of a year by their age at the beginning or end of that year.
This report has used data from the 1992 panel of the SIPP to examine demographic and socioeconomic differentials in the patterns of health insurance coverage among children under 19. Health insurance coverage among children varies by nearly every demographic and socioeconomic characteristic that we examined. Most of the differentials that we observe in the type of insurance coverage and whether there is any coverage at all are moderately strong to very strong. For example, Hispanic children are more than two-and-a-half times as likely to be uninsured as white non-Hispanic children, and black children are four times as likely as white children to be covered by Medicaid.
Because of Medicaid, coverage patterns are not unidimensional. Groups with low rates of employer-sponsored coverage do not necessarily have high rates of uninsurance. High rates of Medicaid coverage can appear among groups with high uninsurance or moderately low rates of uninsurance. Nevertheless, the strongest differentials by far are those associated with parents' education, and these differentials are strikingly unidimensional.
We estimate that one-third of the children uninsured in September 1994 were eligible for Medicaid, based on a Medicaid eligibility simulation that takes account of most but not all of the ways that children may become eligible. There are sizable differentials in Medicaid eligibility across most of the demographic and socioeconomic characteristics that we examined. Differentials in Medicaid eligibility among the uninsured are strongest by family poverty level, followed by the child's age and parents' employment.
Over all eligible children, the estimated Medicaid participation rate is 65 percent. This participation rate does not reflect any adjustment for the underreporting of Medicaid participation in the SIPP, which in 1994 was on the order of 24 percent. If we exclude from the eligible nonparticipants those who were covered by insurance other than Medicaid, however, the participation rate rises to 79 percent. Differentials by demographic characteristics are largely eliminated when the participation rate is defined in this alternative way, and socioeconomic differentials are greatly reduced.
Generally, differentials in the proportion of children ever uninsured during the year are similar in form to differentials in the percentage uninsured at a point in time. Only for race and ethnicity and region did we find that groups were arrayed differently with respect to their likelihood of being uninsured. Distributions of the uninsured by demographic or socioeconomic characteristics differ very little between the point-in-time and annual-ever measures.
The duration of new spells of uninsurance shows little variation by demographic characteristics or parents' employment. There is modest variation in spell length by poverty level and moderately strong variation by parents' education, however. Spell lengths decline with parents' education.
The current duration of active, or ongoing, spells--that is, how long uninsured children have been without coverage--is of interest recently because a number of states are planning to limit eligibility under their CHIP initiatives to children who have been uninsured for some minimum number of months--as many as 12 months. It appears that such restrictions favor the group that is the principal target of CHIP: children between 100 and 200 percent of poverty. This is the one subgroup whose share of the uninsured clearly increases with duration.
We also examined the insurance coverage of children's parents. Between 18 and 21 percent of uninsured children have an insured parent. This suggests that a nontrivial number of parents may be choosing individual coverage but not family coverage--perhaps because family coverage is not offered or is perceived as too expensive. Measurement error may account for part of this finding as well. Parents may report their own coverage but overlook the coverage that extends to their children. This seems particularly likely for the 7 percent of uninsured children who report that a parent is covered by Medicaid. Among children who are themselves reported to be covered by Medicaid, 10 percent have an uninsured parent. This latter is consistent with the child-only eligibility created by the poverty-related expansions of Medicaid in the late 1980s and 1990s.
Finally, to provide detailed information on life cycle patterns of coverage among children, we estimated the frequency with which children experienced periods of uninsurance, with and without Medicaid-eligibility, during each single year of age. We also estimated the frequency with which children experienced periods of reported Medicaid enrollment. Both the probability of being uninsured and the average number of months uninsured among those with any months of uninsurance increase with age. The likelihood of being uninsured for all 12 months shows a particularly strong relationship with age. The probability of being uninsured and eligible for Medicaid has little relationship with age, however, being relatively constant from infancy through age 9 and then dropping a few percentage points to a level that remains essentially fixed through age 18. The average number of months of Medicaid-eligible uninsurance is relatively constant across the entire age range as well. By contrast, uninsurance without Medicaid eligibility is even more strongly associated with age than uninsurance in general. The estimates of Medicaid participation by single year of age make clear the prominent role of Medicaid as a source of coverage among infants and the increasingly smaller role that Medicaid plays as children grow older. As more children become eligible for the federally mandated coverage for children below the poverty line who were born after September 30, 1983, however, these age differentials will gradually diminish.
1. Each year the upper age limit for federally mandated coverage rises by one year, in effect.
2. Foster children may be covered by Medicaid and, depending on whose household they appear in the SIPP, could be reported as having no parents in the household.
3. The SIPP instrument includes questions on insurance coverage provided to household members by persons outside the survey household, but it is not difficult to imagine that such coverage is reported less completely than coverage provided by parents or other adults in the household.
4. The poverty thresholds, which are provided on the SIPP file, are the same thresholds that the Census Bureau used to calculate the official estimates of children in poverty in 1994.
5. Monthly poverty rates run higher than annual poverty rates, generally, but annual poverty rates obtained from the SIPP by aggregating monthly income and poverty thresholds for individuals tend to run lower than the official poverty rates estimated from the Current Population Survey (CPS). The difference in the annual estimates can be attributed in large part to the SIPP's more accurate attribution of income to family members actually present each month.
6. These estimates of Medicaid eligibility are based on a detailed simulation described in Technical Appendix A. The simulation uses monthly income (in this case for September 1994) and other characteristics--such as the child's age and family composition--measured in the same month, along with state-specific eligibility criteria. The use of monthly data yields a more accurate simulation of the actual Medicaid eligibility determination than does the use of annual data or characteristics measured only once during a year. Other things being equal, monthly income would yield more eligibles than annual income, but there are a number of factors that confound the comparison of our monthly simulation with what other researchers have done with annual data. Finally, our simulation does not include the spend down features of the medically needy program, because the SIPP does not collect medical expenditure data. Therefore we know that we understate eligibility for Medicaid. We are not aware of any other simulations that are comparable to ours in other respects but include this feature of eligibility.
7. We exclude children who were reported to be participating in Medicaid but were simulated to be ineligible. We do so because many of the simulated ineligible participants may have been eligible for Medicaid under provisions that we did not simulate. To include just the participants would be equivalent to assuming that there were no nonparticipants among this additional group of eligibles when the participation rates that we observe for children eligible under related provisions suggest that there may have been at least twice as many nonparticipants as participants.
8. If some of these children were actually enrolled in Medicaid and their coverage had simply been misreported, we would want to include them in both the numerator and denominator of the participation rate. If all of these children were actually enrolled in Medicaid, including them in this way would yield a Medicaid participation rate of nearly 83 percent.
9. It is plausible, as well, that some number of spells that lasted fewer than four months were not reported at all. On balance, we suspect that spells of 1 to 4 months in length are still overstated, but the potential exclusion of some spells altogether has implications for the estimated number of children who were uninsured at a point in time or ever in a year. In fact, all misreporting of durations may affect estimates of incidence as well..
10. Fewer than 5 percent of the uninsured children in families above 200 percent of poverty were simulated as Medicaid eligible.
11. For example, a child who was observed at age 1 in September 1993 could have turned 1 in any of the months from October 1992 through September 1993 and ended that year of age in any of the months from September 1993 through August 1994.
12. We attribute the variability that we see to sampling error.
13. Recall that the proportion eligible for all 12 months among all children is the product of the proportion eligible all 12 months among those ever eligible, which rises with age, and the proportion who are ever eligible, which declines with age.
14. The 39 percent of infants whom we find to have ever participated in Medicaid during their infancy and their average of 10.3 months of coverage imply that 33.5 percent of infants would have been covered by Medicaid at any point in time. This compares quite closely to the 34.2 percent who were reported as covered in September 1993 (Table B.3).