1. Simulations that lowered the public insurance eligibility to 300%, 200% and 100% of the federal poverty line (FPL) resulted in a sizeable and increasing number of theoretically uncovered hospitalizations that may total up to $4.5B in health care costs.
2. Hospitalized children on public insurance who would become ineligible for public insurance based on lower the public insurance income limit were predominantly white, newborn and urban-based.
Evidence Rating Level: 2 (Good)
Study Rundown: Medicaid and the Children’s Health Insurance Program (CHIP) provide health care coverage to over 30 million children. Both organizations are jointly funded by the federal government and state governments, with states largely administering the various components of their programs. Cuts to federal funding may force states to enact cost-saving strategies, including decreasing income eligibility thresholds for public insurance enrollment. The purpose of this study was to determine the number, estimated costs, and demographic characteristics of hospitalizations that would become ineligible for reimbursement under public insurance in 3 FPL limit eligibility scenarios. In such scenarios, reducing public insurance eligibility to 300%, 200% and 100% of the FPL resulted in up to 45.5-90.6% hospitalizations that would be uncovered by public insurance, totaling up to $1.2-4.5B in estimated costs that would be primarily displaced to families, other insurers or hospitals. The children covered by public insurance who would become ineligible for public insurance based on the 3 FPL limit eligibility scenarios were predominantly newborns, white and urban-based. Limitations of this study included data from only 14 states, use of zip codes as a proxy for socioeconomic status and inability to account for retained insurance coverage through disability status.
In-Depth [retrospective cohort]: Data was obtained from the Agency for Healthcare Research and Quality’s State Inpatient Databases (SID) for pediatric (<18 years of age) hospitalizations between January 1, 2014 and December 31, 2014. Zip codes were used as geocode proxies for FPL determination. States that did not provide zip codes in SID were excluded. A total of 775,460 hospitalizations from 14 states were included in the final analysis. The primary outcome included estimated number and cost of hospitalizations deemed ineligible for public reimbursement when public insurance eligibility thresholds were decreased to 300%, 200% and 100% of the FPL for publicly insured children. Secondary outcomes included demographic characteristics of publicly insured children who would lose eligibility under the above scenarios. Of the included families, approximately 43.1%, 27.2% and 11.2% lived below 300%, 200% and 100% of the FPL, respectively. Reducing the public insurance threshold to 300% of the FPL in 7/14 states where public insurance eligibility exceeds 300% of the FPL resulted in 155,000 uncovered hospitalizations, totaling $1.2B in estimated costs. Reducing public insurance threshold to 200% of the FPL in 13/14 states where public insurance eligibility exceeded 200% of the FPL resulted in 440,000 uncovered hospitalizations, totaling $3.1B in estimated costs. All states had public insurance thresholds exceeding 100% of the FPL and lowering this threshold to 100% resulted in 650,000 uncovered hospitalizations totaling $45.5B in estimated costs. White children (38%) comprised the largest percent of public insured hospitalized children in this study, followed by Hispanic (24.5%) and African American (20.2%) children. The majority of children resided in urban settings (84.2%) compared to rural (15.8%). Newborns represented the majority of children for all public insurance hospitalizations (53.2%).
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