More parents with health coverage through work use public insurance for kids

It might seem logical that if parents have health coverage through work, they’d include their kids on that plan. But a new analysis out of the Children’s Hospital of Philadelphia has found that more and more parents with plans from their employer are opting for public health insurance — such as Medicaid or the Children’s Health Insurance Program — for their kids.

Doug Strane, a lead researcher, said employer-sponsored health insurance has changed a lot in recent years. 

“Between 2008 and 2013, the amount that families were paying out of pocket for that coverage increased by about 40 percent,” said Strane. “So you can imagine if you’re a relatively low-income family earning about $25,000 a year, paying upwards of $5,000 for insurance for your family, that really is a big chunk of your family’s bottom line.”

Strane reviewed children’s health insurance rates between 2008 and 2013 among low- and moderate-income families where a parent had coverage through work.  He found that, by 2013, almost a third of kids in the lowest income bracket had public insurance, going from 22.8 percent in 2008 to 29.9 percent in 2013.

“Some people think of these programs, the children’s health insurance program or Medicaid, as a safety net for unemployed families,” he said. “But what we’re actually finding in our study is that it’s actually working families who are using these programs a lot as well, and they’re playing a really important part in keeping these kids covered.”

The analysis doesn’t break down this growing trend by state, but, in Pennsylvania, about 1.3 million kids have public health insurance.

Dr. David Rubin, director of population health at CHOP and a co-author on the study, said Pennsylvania allows families making up to about $70,000 a year to put their kids on public insurance, though they have to pay more for the coverage under CHIP. New Jersey also has this option. In Delaware, the income cutoff is lower, according to the Kaiser Family Foundation.

Rubin found that, nationwide, more kids are actually going uninsured among families with those higher incomes. He thinks that’s because eligibility can vary by state, with working families in certain states who fall into that $45,000 to $70,000 income bracket not qualifying for children’s health insurance. 

“And that’s a gut-wrenching decision, to me, to think the family would have to make that choice that they could get coverage for themself as a parent but they can’t for their children,” he said.

The uptick in the rate of kids without insurance — from about 6 to 9 percent in that income bracket — goes against the overall trend since CHIP was introduced in 1997, Rubin said.

It’s important to be aware of these shifts as Congress considers whether to renew funding for CHIP next year, he said.

The Affordable Care Act, which was enacted after the time period of this analysis, also requires states to maintain their level of eligibility and coverage for Medicaid or CHIP. These “maintenance-of-effort requirements” expire in 2019.

The study also points out that one problem for moderate-income families looking to get coverage for their kids since the enactment of the Affordable Care Act has been the “family glitch.” Parents who are offered a health insurance option through their work that does not cost more than 10 percent of their income are not eligible for subsidized coverage for themselves or their kids through the marketplace.