Analysis of Children's Health Insurance Patterns: Findings from the SIPP. What Proportion of Uninsured Children Are Eligible for Medicaid?

05/12/1999

Our simulation of Medicaid eligibility revealed that 2.9 million, or 33 percent, of the estimated 8.9 million uninsured children in September 1994 were eligible for Medicaid. This is comparable to what other researchers have reported with more limited Medicaid eligibility simulations (Lewis et al. 1997).2 With longitudinal data, however, we could also address the question of what happens to these Medicaid-eligible uninsured children over time; and what we found suggests that policymakers need to think about the Medicaid-eligible uninsured differently than they may have in the past.

Our findings do not support the inference that all 3 million of these children would be enrolled in Medicaid if only Medicaid outreach were more effective. First, much of this group is in transition--including transition to Medicaid. Between one month and the next about 20 percent of the Medicaid-eligible uninsured children completed the transition, with roughly equal shares enrolling in Medicaid, obtaining employer-sponsored or other coverage, or experiencing a rise in family income that made them ineligible for Medicaid. Within five months, more half of the initial 2.9 million Medicaid-eligible uninsured children had left that state. The mobility among the Medicaid-eligible uninsured suggests that while all of these children could theoretically be brought into Medicaid, or brought into Medicaid more quickly, it is useful to distinguish between those who would remain eligible and otherwise uninsured for only a few months and those who would remain in that state for a much longer period. Second, 25 percent of the children who transition in and out of Medicaid eligibility and between 40 and 50 percent of those who remain Medicaid-eligible and uninsured for longer periods were actually enrolled in Medicaid previously. Thus, there is a sizable group of uninsured and Medicaid-eligible children for whom it may be more relevant to ask why have they left Medicaid than why have they not enrolled. Better Medicaid outreach is not the answer to removing them from the uninsured.

In 1994, about one million children remained uninsured for a year or more despite being eligible for Medicaid, and the number is likely to have grown since then. Policymakers would do well to focus on this group, whose persistence in this condition suggests that they are hard to reach and so will require extraordinary outreach techniques if they are to be brought into Medicaid. The demographic and socioeconomic characteristics that we examined shed little light on what differentiates this group of children from those who more quickly become insured or Medicaid-ineligible. Ultimately, understanding why children remain uninsured and Medicaid-eligible for a year or more may require different kinds of data than our surveys can provide, but we have not exhausted what longitudinal surveys like the SIPP can tell us.

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