Analysis of Children's Health Insurance Patterns: Findings from the SIPP. What Precedes Spells without Insurance?

05/12/1999

Between October 1992 and September 1994, children started nearly 19 million new spells without insurance. Each month, on average, about 800,000 children became uninsured. In the month preceding each new spell, 52 percent of these children were reported to have been covered by employer-sponsored insurance, 39 percent by Medicaid, and 6 percent by another source of insurance. The remaining 3 percent were born uninsured.

Altogether, more than 550,000 children left Medicaid each month, on average. More than half of this group--56 percent--started new spells without insurance. Just over one-third, or 34 percent, gained employer-sponsored coverage, 2 percent obtained coverage from another source, and 7 percent turned 19 or became ineligible for the SIPP.1

These findings beg the question: why do so many children leave Medicaid only to become uninsured? Loss of Medicaid eligibility appears to explain fewer than half of these transitions from Medicaid to uninsured. That is, more than half of the children who left Medicaid and became uninsured still appeared to be eligible for Medicaid, according to a state by state simulation of the Medicaid eligibility rules. It is possible that reporting error may account for some of these apparent departures from Medicaid by eligible children, contributing to the recognized undercount of Medicaid enrollment.2 Research in progress will shed light on the potential role of reporting error in particular, and on the circumstances surrounding these changes in Medicaid enrollment and insurance coverage more generally. Even if the number of children moving from Medicaid to uninsured proves to be fewer than the estimate reported here, policymakers need to shift some attention from the question of why children are not enrolling in Medicaid to the question of why they are losing coverage, especially when many of them may still be eligible.

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