Major Medical and Employee Benefits for Companies

Dec 27, 2021

Though they live in one of the world’s richest nations, a growing number of young Americans are without ample health insurance.

A new study reports that 34% of U.S. kids age 17 and under were "underinsured" in 2019. That means their insurance failed to address their overall health needs or ensure access to preferred providers; that it came with high out-of-pocket costs; or wasn't in effect at all times.

And the trend appears to be getting worse, given that 30.6% lacked adequate coverage in 2016.

That means there are 2.4 million more at-risk kids whose insurance is not cutting it. And researchers say a large portion of the flimsy coverage is private -- not public -- insurance.

"Inadequate insurance -- mainly experienced as high out-of-pocket costs -- causes families to delay, sometimes even forgoing, the medical care their child needs," said study author Dr. Justin Yu, an assistant professor of pediatrics at the University of Pittsburgh Medical Center (UPMC) Children’s Hospital of Pittsburgh.

"Especially for children with chronic and complex health conditions, families have to choose between paying for their child's medical care or basic necessities like food and housing," he said.

For the new study, Yu and his colleagues analyzed data from a federal government survey conducted between 2016 and 2019. The National Survey of Children’s Health is a yearly look into the physical and mental health of more than 73 million Americans under age 18.

On average, just over two-thirds were deemed to have continuous and adequate insurance coverage over the four-year study period. But roughly 1 in 3 did not.

The researchers said having "unreasonable" out-of-pocket medical expenses, rather than a lack of insurance, was the main problem.

And that, they said, reflects a growing pattern in which private insurance companies increasingly off-load their overhead by imposing higher copays, premiums and deductibles.

Because regulations make transfers of such cost burdens less likely in public programs such as Medicaid or the Children’s Health Insurance Program (CHIP), kids covered by private insurance are more vulnerable to being underinsured, the authors said.

At the same time, however, Yu said more and more kids have been shifted off Medicaid and CHIP in recent years, in favor of private coverage with diminishing returns. He attributed that to a combination of economic incentives as well as state and federal policy decisions.

This may also explain why the study found that children from relatively wealthier households -- those considered middle-class and well-educated -- appear to be bearing much of the increased risk.

Rising underinsurance rates were notably higher among kids in households at or above 200% of the federal poverty line, the study found.

To address the problem, major policy reforms must be considered, Yu said.

"This includes further expanding Medicaid eligibility criteria for children, expanding Social Security income financial assistance for families of children with disabilities and chronic health conditions, and consideration of a national single-payer child health insurance program," he said.

Katie Keith, a researcher with Keith Policy Solutions LLC in Washington D.C., and an adjunct professor of law at Georgetown University, reviewed the findings.

"The documented increase in underinsurance for children is very concerning, and troublingly consistent with similar findings for adults," she said, adding that growing consumer costs, driven by rising deductibles and out-of-pocket expenses, are linked to underlying health care costs, which continue to rise rapidly.

"Underinsurance for children is particularly troubling, because of the long-term impact it can have on a family's financial stability and their ability to access the health care that their child needs," Keith said.

She and Yu agreed that passage of the Affordable Care Act (Obamacare) in 2010 has helped to prevent an even more concerning situation.

"Things would arguably be much worse for children's coverage in the absence of the ACA," Keith said.

Dr. Suzanne Berman, chair of the American Academy of Pediatrics' section on administration and practice management, agreed.

But she cautioned that neither the ACA nor states regulate the types of self-funded, job-based insurance plans that typically cover children. According to Berman, about 6 in 10 job-based plans now fall under that model, in which employers cover employee claims as they are incurred, instead of paying a monthly employee premium to an insurer.

Too often, these plans "are permitted to pick and choose what services they offer," Berman said. That often means no coverage for wellness visits or vaccines, so "attention to the special needs of children’s health care coverage often gets neglected in the picking and choosing."

"I could totally see a family being sticker-shocked by a teenager’s well visit," she added, "let alone an illness requiring imaging, labs, hospital care, (or) therapy."

That problem is further compounded by high-deductible employer plans, as well as poor Medicaid reimbursement rates which discourage doctors from participating, Berman noted.

Any response to the trends highlighted in the study, she said, will have to take all three problems into account.

The findings were published Dec. 6 in the journal Pediatrics.

Original post: https://www.usnews.com/news/health-news/articles/2021-12-07/1-in-3-u-s-children-lack-adequate-health-insurance