Changes Ahead

What health care reform means for America's children

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Just before Allison Restemayer turned 2, she was diagnosed with Mucopolysaccharidosis I (MPS), a genetic disorder that means her body is unable to produce certain enzymes and cells cannot function as they should. Shortly after her diagnosis, Allison and her family found hope in a new enzyme replacement therapy, with a synthetic version of the enzyme she's missing delivered in weekly infusions. Now Allison is 9, and her treatment has used almost $1.7 million on her family's insurance plan; there is a $2 million lifetime limit. With Allison's MPS, a preexisting condition, she was unlikely to find additional coverage if her family lost or exceeded their current insurance--but her chances improved about six months ago.

President Barach Obama with Kathleen Sebelius and Nancy Pelosi just after signing the Patient Protection and Affordable Care Act into law. Photo by Pete Souza, White House

On March 23, President Barack Obama signed the Patient Protection and Affordable Care Act (ACA; P.L. 111-148) into law. Prior to the enactment of ACA, there were more than 7 million children without health care coverage, most of whom are eligible for Medicaid or the Children's Health Insurance Program (CHIP). This landmark legislation will expand coverage to millions of Americans who are currently uninsured. Many politicians tout the enactment of this legislation as the most sweeping and perhaps most important piece of social legislation in decades. "This is a system-changing bill," agrees Tim Briceland-Betts, CWLA's director of government affairs. "It's a new world."

Some of the changes outlined in the ACA begin to take effect this fall. Children and youth will benefit from many of the improvements in the new law, including the extension of employer-based dependent coverage until age 26 and access to free preventative services such as immunizations, physical exams, vision and hearing screenings, oral health risk assessments, screenings for potential developmental problems, and counseling for obesity and depression. Children like Allison, who have preexisting medical conditions, will benefit from ACA because it bans insurance companies from denying coverage to people with preexisting conditions and eliminates lifetime limits on coverage.

Impact on Child Welfare

"We know that children who have a history of maltreatment, who come in contact with child welfare, who are in the system, who are in foster care--they have more health problems, more mental health issues than other children," Briceland-Betts says. "The best part about the new health reform legislation is the extent to which these challenges are going to be addressed, and they are going to be addressed in some major, significant ways."

The first of these is a new dedicated federal funding stream to support home visitation programs. Home visiting refers to voluntary services that educate parents on healthy child development, positive parenting skills, school readiness, and other factors that help support a safe home environment and positive early childhood development. Home visitors are usually nurses, social workers, teachers, or other trained paraprofessionals. The programs usually target low-income families, single parents, first-time parents, and other at-risk families. The national home visiting programs include Healthy Families America, Home Instruction for Parents of Preschool Youngsters, Parents as Teachers, Nurse Family Partnership, and the Parent-Child Home Program. The ACA authorizes $1.5 billion over five years to carry out this new grant program. While these grants are designed to fund a range of evidence-based home visitation programs for young children and families, priority funding will be dedicated to evidenced-based models with promising and new approaches.

The crowd at the three-month anniversary of the Affordable Care Act included families benefitting from the legislation as well as government official. Photo by Pete Souza, White House

There is also $75 million provided under ACA for the Personal Responsibility Education Program until 2014. Programs funded under this grant must be designed to educate adolescents on abstinence, pregnancy prevention, sexually transmitted infections, financial literacy, parent-child communication, healthy life skills, and adolescent development. Similar to the home visiting grant, there is an emphasis on evidence-based programs. This funding will be administered by the Administration for Children and Families and targets at-risk youth ages 10-19, including youth who are in the foster care system or are homeless, who have HIV, or who are teen parents.

While not directly related to health care, another part of the ACA has a significant impact on child welfare: the extension of the adoption tax credit and adoption assistance program through December 2011. The adoption tax credit has existed since 1997 to help encourage adoptions from foster care. The ACA increases the credit by $1,000 and makes the credit refundable, meaning families who adopt children after January 2010 can benefit from a tax credit regardless of their income. This is of particular importance to families interested in adopting from the public foster care system, as many of these families either did not know about the tax credit or did not earn enough taxable income to take advantage of the credit. Although not linked to health care, Briceland-Betts says the adoption tax credit is "good public policy."

Medicaid/CHIP

In tough economic times many families rely on Medicaid and CHIP as vital safety nets when they lose their private or employer-based coverage. Currently, 49% of Medicaid recipients are children, but they only account for roughly 20% of the program's expenditures. In 2014, eligibility will expand to individuals with incomes up to 133% of the federal poverty level (FPL)--this affects about a quarter of the U.S. population. In 2009, FPL was $14,404 for an individual and $29,326 for a family of four.

Also in 2014, individuals with incomes between 133% and 400% of FPL (more than 40% of the U.S. population) will be eligible for subsidies for coverage through state-based health benefit exchanges. Individuals eligible for Medicaid would not be eligible for subsidies in the state exchange, but it would benefit children in families where the parent(s) earn too much to qualify for Medicaid/CHIP coverage, but not enough to purchase coverage in the private insurance market. Expansion of Medicaid and CHIP is particularly beneficial to the children served by CWLA member agencies, Briceland-Betts says. "Many, many currently uninsured children will be eligible and will get health care coverage," he explains.

Under the new law, states will be barred from limiting their eligibility for children in Medicaid and CHIP through 2019 and for adults in Medicaid until 2014 (when coverage through the exchanges is expected to be available). This has already acted as a shield for children in states that were considering reducing CHIP eligibility in order to free up funds in tough budget situations.

Arizona, for example, "has had an incredibly difficult time weathering the economic downturn," reports Monica Coury, the assistant director of intergovernmental relations and a spokesperson for Arizona Health Care Cost Containment System, the division that runs Medicaid and the KidsCare state CHIP program. KidsCare enrollment had already been frozen since January 1, 2010, Coury explains, and among "a variety of very difficult decisions," the final budget passed by the legislature and signed by the governor would have eliminated the program entirely by mid-June. However, after the enactment of the ACA, the federal Center for Medicare and Medicaid Services notified the state that eliminating KidsCare was a direct violation of the Medicaid Maintenance of Effort requirement in the new law. Coury admits that cutting the program would have cost Arizona federal money for the entire Medicaid program, an estimated $7.8 billion. Not wanting to risk that, the Arizona legislature restored the program, but kept the freeze on enrollment. Coury says the freeze will remain for the foreseeable future. "When we look ahead, we see more challenging times," she explains, citing the end of stimulus funds for Medicaid on July 1, 2011. "At this point, we can't even contemplate reopening the KidsCare program."

Children currently covered by CHIP between 100% and 133% of FPL will be transitioned to Medicaid coverage in 2015. These changes help to provide seamless and affordable coverage nationwide. The ACA provides funding for CHIP through 2015, and continues the program through 2019 with limited financial assistance to states to ensure access to coverage while the exchanges are being set up. CHIP-eligible children who cannot enroll in the program due to federal allotment caps would go through a screening process to determine if they are eligible for Medicaid. Those not eligible for Medicaid would automatically be eligible for tax credits in a CHIP-like plan in the exchange. The Congressional Budget Office estimates that an additional 16 million people will obtain Medicaid/CHIP coverage in 2019.

Youth in Care and Aging Out

Currently, states provide health coverage for children in foster care through Medicaid. However, when youth age out of care, many lose their coverage and find themselves uninsured. In order to reduce the number of former foster youth who become uninsured, Congress passed the Foster Care Independence Act in 1999, which contained a very important provision known as the Chafee option. The Chafee option allowed states to extend Medicaid coverage to former foster youth up to age 21. This has been expanded even further under the ACA. Starting in 2014, Medicaid coverage will be extended up to age 26 for former foster youth.

This will make a huge difference for foster care alumni. "Their health challenges are significantly more serious than [those of] the general population," Briceland-Betts explains, noting that unresolved health or mental health problems can affect other areas of alumni's lives, making it harder to get and hold a job, to form supportive relationships with peers, and generally to transition into adulthood. Studies have shown that almost a quarter of former foster youth experience some form of posttraumatic stress later in life. For many foster care alumni, the extension of Medicaid coverage under ACA will mean the difference between seeing a doctor and going without much-needed treatment. Under the ACA, caseworkers will be required to help youth navigate and process information regarding their health care needs, such as coverage options and health care power of attorney resources, while in transition and thereafter.

Briceland-Betts points out that in addition to the extension of coverage to age 26, youth who have emancipated from foster care may well be covered by another provision of ACA: "Medicaid is expanded to include anyone up to 133% of the poverty level," he says. Many former foster youth struggle to find adequate employment, and so they fall into this group.

Benefits for Other Children

The new law seeks to protect consumers by barring health insurance companies from imposing preexisting condition exclusions on children's coverage, meaning that children with asthma, leukemia, sickle cell, and certain birth defects will not be subject to benefit limitations or outright coverage denials. Additionally, new health insurance plans cannot rescind coverage once the enrollee becomes sick or if it is later determined that an enrollee has a costly medical condition. This is the part of the law that was such a welcome change for Allison Restemayer and her family. Earlier this year, her mother Jennifer wrote to the White House about their situation: "Allison's lifetime max is going to be a big problem.... One surgery and one hospital stay put us about $300,000 closer to hitting her max. Allison has also had 354 weekly IV infusions of her Enzyme Replacement Therapy in the last seven years.... By the end of 2010, Allison could be above 1.7 million of her 2 million dollar lifetime max." After White House staff read the letter, Jennifer Restemayer was invited to President Obama's June press conference to celebrate the 90-day anniversary of the ACA's passage; thanks to the ACA, Allison's lifetime cap on coverage disappeared September 23 (see sidebar on page 29).

Implementation

Since some of the provisions in ACA became effective upon enactment, the Obama Administration immediately began working with states to reduce barriers to implementation. To date, states have already determined whether they plan to participate in creating a temporary high-risk pool for the uninsured in their respective state, or if they will allow the federal government to be responsible for the pool. States have taken both options. These temporary pools will remain in effect until the exchanges open up in 2014.

With the administration beginning to fund evidence-based home visiting programs this fall, states have already been required to complete the application process and conduct a needs assessment. Later in the year, they will receive guidance on amending their state plans to address any additional changes that may be required under their current maternal and child health grant programs. Additionally, more than $80 million has been allocated for states to assist with the implementation of the new grant program, including costs associated with carrying out the needs assessment.

Challenges

Currently, Medicaid and CHIP rules require states to establish a five-year waiting period for lawfully residing adults (with states able to waive the waiting period for children and pregnant women). While legal immigrants, who are not eligible for Medicaid or CHIP, can obtain coverage in the exchange and begin receiving premium and cost-sharing subsidies based on their income in 2014, undocumented immigrants will remain ineligible for Medicaid and CHIP, and will not be able to obtain coverage through the exchanges. This, in effect, will continue to have a negative impact on the costs of emergency services.

In addition, because the law requires insurance companies to change some of their traditional practices, getting buy-in from those companies is an ongoing process. The Obama Administration is working with insurance companies between now and 2014 to ensure that quality health care coverage is not compromised and that plans are not restricted to the point where they deter hardworking families from purchasing policies.

Since the enactment of the law, there have been serious questions about the ability of Congress to fund some of the new initiatives. For example, while there is more than $5 billion set aside in the ACA for the implementation of the temporary high-risk pools, some states have been reluctant to set up their own pools, citing financial difficulty. In addition, with states struggling now to get additional federal medical assistance (commonly referred to as FMAP), some states and health care providers are skeptical they will see the money promised to them to cover those newly eligible under Medicaid. On top of this, congressional deadlock proves difficult to approve much-needed FMAP extensions and increases for the states.

But as the number of people eligible for Medicaid rises, the number of doctors accepting Medicaid is not growing proportionately. In many rural areas, families on Medicaid have to drive hours to find doctors who are accepting new patients. This difficulty is compounded for homeless and transient families, who must reestablish care--and sometimes even their eligibility for it--everywhere they go. There is also an access barrier in terms of pediatric specialists, and many of the children and youth who come into the child welfare system (and many of those at risk) have unmet needs that can only be addressed by a limited number of specialists. Briceland-Betts is hopeful that doctors will step up to meet the demand for their services: "We certainly do expect that health care providers will recognize the advantages of the new opportunities and will, in fact, be providing the services."

Although much progress has been made under CHIP, the Foster Care Independence Act, the Fostering Connections to Success Act, and the ACA, the Obama Administration remains upfront about the work that lies ahead. At a briefing this September, Health and Human Services Secretary Kathleen Sebelius issued a challenge to everyone to assist in the enrollment the millions of uninsured children who are eligible for Medicaid or CHIP. "Despite the great advances that states have made over the years, there are nearly five million uninsured children who are currently eligible for coverage but are not enrolled," she said. "I'm challenging everyone, from my state and federal counterparts, to local governments and community-based organizations, to health centers and school districts, to faith-based groups and Indian tribes, to take this conversation about children's coverage to the next level--to find and enroll those five million kids."

YaMinco Varner is a government affairs associate at CWLA.
Meghan Williams contributed to this article.

To comment on this article, e-mail voice@cwla.org.

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