Tools & Resources

Do No Harm: The impact of access fees on children's health coverage

Issue Papers

September 12, 2005 | Download Document

This report estimates the number of children on Medicaid who would be expected to lose coverage under National Governors Association cost-sharing proposals before Congress.

Key Findings

  • Six million low-income children who are currently protected from cost-sharing would be exposed to new co-pays, premiums, deductibles and other charges under the National Governors Association (NGA) proposal before Congress.
  • Even at relatively low levels, premiums and annual enrollment charges (access fees) have been proven to substantially reduce participation in public health insurance programs. Eliminating rules that prevent cost-sharing in Medicaid will significantly increase the number of uninsured children in the country.
  • While the exact number of children who lose coverage would depend on state-level decisions, it would be expected based on past experience that between 500,000 and 1.5 million children would lose health coverage if Congress adopts the NGA proposal.
  • Under the NGA proposal, states would be allowed to charge children living in families just above poverty new access fees that could reach up to five and in some cases seven-and-a-half percent of their family income.
    • A family of three at 101% of poverty ($16,250 for a family of three) could pay up to $813 annually.
    • A family at 133% of poverty ($21,560) could pay up to $1,078 annually.
    • A family at 151% of poverty ($24,300) could pay up to $1,823 annually.
  • When faced with budget pressures and given the opportunity, most states charge low-income families access fees to enroll their children in health care. Almost 70% of children live in states that charge at least some low-income children premiums.
  • The number of states charging access fees is increasing along with the amount of these fees. The median access fee is one percent of annual family income. Some states charge as much as four percent of family income. Premiums are often regressive in nature - poorer families pay a larger percentage of their income in premiums.
  • Almost all of the Medicaid savings from allowing states to charge premiums and co-pays would derive for fewer children being insured and children receiving fewer necessary health services.
  • In an effort to save a relatively modest amount of money ($1.2 billion over five years) from the Medicaid program Congress would potentially increase the number of uninsured children in America by between six and eighteen percent.
  • Even parents who are willing to pay the premiums and co-pays often find that they are unable to do so because they lack the cash needed at a particular time (e.g., they had to pay more than expected for heating). As a result, their children may lose their health insurance or be unable to get medical care.