Insuring Parents and Children Under Health Reform: Implications for Family Costs and Coverage

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Beginning in 2014, many low- to middle-income families are gaining health care coverage with help from provisions in the Affordable Care Act (ACA).  These include the availability of subsidized private coverage in the state and federal marketplaces, as well as the expansion of the Medicaid program in more than two dozen states.  Yet as an article in The Connecticut Mirror reports, the varying eligibility requirements for each insurance option mean members of a single family may be spread across different types of plans, raising questions about the impact on coverage and out-of-pocket costs.

Low- to middle-income families face a number of options for gaining health care coverage under the ACA: 

• Subsidized private coverage.  The new federal and state-based marketplaces allow consumers to compare various health plans and purchase coverage, sometimes with the help of federal subsidies.  In order to qualify for a subsidy, a consumer’s income must fall within a certain range for his or her family size.  Those people whose incomes fall below certain thresholds cannot receive subsidized private coverage in the marketplaces, but may qualify for their state’s Medicaid program.
• Medicaid.  Twenty-five states and the District of Columbia have opted to expand their Medicaid programs to include adults under age 65 with incomes at or below 138 percent of the federal poverty level.  This policy change extends Medicaid coverage to low-income adults without dependent children and sets uniform income eligibility standards for adults with children.  Even in states that have chosen not to expand their Medicaid programs, some officials expect enrollment to grow as heightened national attention to Medicaid prompts previously eligible but non-enrolled individuals to sign up.
• Children’s Health Insurance Program.  While some states offer health care coverage to children via Medicaid, others run a separate Children’s Health Insurance Program (CHIP), while still others use a combination of the two approaches.  The ACA extends CHIP funding until October 2015, and also provides additional federal dollars to promote enrollment in CHIP and Medicaid.

Navigating these options may prove challenging for low- to middle-income families, especially in cases where parents and children are divided across coverage types.  As The Mirror reports, many families purchasing coverage through Connecticut’s health insurance marketplace will end up with subsidized private coverage for parents and coverage through Husky B – the state’s CHIP program – for children.  Parents in these families could choose to enroll their children in private coverage instead, the newspaper reports, but they would have to pay the full price.

In an ongoing HCFO-funded study, Kathleen Adams, Ph.D., Emory University, and Patricia Ketsche, Ph.D., Georgia State University, are analyzing prior state Medicaid expansions to estimate the impact of increasing eligibility for public and/or subsidized private insurance on the coverage status and out-of-pocket costs of a family unit.  Using the Annual Social and Economic Supplement to the Current Population Survey for 2000-2013, the researchers are examining the variation in expansion policies across 17 study states and over time to identify how these public expansions affect the insurance coverage of all family members.  The researchers are also analyzing a subgroup of 10 states that provided subsidies or premium assistance as a part of coverage expansion to assess their effects on family coverage.  Finally, the researchers will analyze the family out-of-pocket costs associated with different types of coverage scenarios, such as full family coverage on the same plan; mixed family coverage, with all family members covered but by different plans; partial family coverage, with certain family members covered and others uninsured; or no coverage for a family unit.  The goal of the project is to help inform future policy decisions regarding state Medicaid expansion, CHIP renewal, and basic health plan options under the ACA.

Additional information about Dr. Adam’s and Dr. Ketsche’s HCFO study is available here.