Supreme Court’s Health Care Decision: Good for Kids, What About Parents?

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Yesterday’s affirmation of the federal Affordable Care Act by the U.S. Supreme Court maintains several important health care provisions that protect the well-being of children and youth, but the court’s ruling on the Medicaid portion of the law, which now allows states to essentially opt out of expanding Medicaid access to an estimated 17 million low-income adults around the country — includingnearly 5 million parents of low-income children — remains a source of concern, researchers and advocates said.

“When states refuse to cover low-income parents, the children of those parents will suffer,” said Stan Dorn, a senior fellow at the Urban Institute’s Health Policy Center, a Washington, D.C.-based think tank that has conducted a number of studies on the impact of the law. “When parents have their problems addressed, that can have a dramatic effect on income and children’s ability to thrive.”

Eight child health and advocacy groups, including the American Academy of Pediatrics, the Children’s Hospital Association and the March of Dimes, released a joint statement yesterday from organizational leaders who largely praised the decision, as well as a few who expressed worry over the consequences of the Medicaid ruling.

The income eligibility levels for adults to access Medicaid vary widely across states, from as low as 17 percent of the federal poverty level in Arkansas, to 191 percent of the federal poverty level in Connecticut, said Jennifer Tolbert, director of state health reform at the Kaiser Family Foundation. The federal poverty level in 2012 is $26,344 a year for a family of three. According to the Kaiser Family Foundation, the ACA would set a new universal standard for coverage by 2014 – 133 percent of the federal poverty level, and up to 138 percent in some cases – that is far above the eligibility standards for many states right now.

“There are a lot of very low-income parents who are ineligible for Medicaid today,” Dorn said.

As an incentive for states to expand their Medicaid coverage to this new population, the federal government would pay 100 percent of all funds required for the expansion for the first three years of the program, and would gradually reduce that contribution to 90 percent by 2019, resulting in billions of dollars heading to states that could help them balance their budgets, Dorn said. From 2019 onward, the federal government would continue to cover 90 percent of all costs.

However, the ACA as originally written also carried a strong penalty for states that did not participate: they’d lose all their federal funding for Medicaid, not just the part that paid for expansion to previously ineligible low-income adults.

In yesterday’s ruling, Supreme Court Chief Justice John Roberts likened the penalty to “a gun to the head,” and said the federal government could not force states to participate in a program that the states could not have reasonably expected to be extended to a wider population.

Instead of striking down the whole law legislating the expansion, however, a majority of justices voted to strike just the part that penalized lack of participation, and made the expansion of Medicaid a state choice.

Democrats rejected Roberts’ characterization of the expansion law. “We think that most governors would probably accept 100 percent funding without matching funds,” said Nancy Pelosi, the Democratic leader of the U.S. House of Representatives, at a news conference yesterday. “It’s not a gun to the head.”

Even if some states choose not to expand Medicaid coverage under the Affordable Care Act, that won’t technically affect health care coverage or eligibility levels for low-income children, pointed out Jennifer Tolbert, director of state health reform at the Kaiser Family Foundation.

Children will continue to be covered under the ACA, which forbids states from creating any additional paperwork barriers and requires them to maintain children’s access to Medicaid and SCHIP – which allows low-income parents to buy affordable coverage for their kids — until 2019.

In fact, that requirement is one of the most child-friendly provisions of the ACA, said Jocelyn Guyer, the co-executive director of the Center for Children and Families at Georgetown University.

Other important provisions for children under the ACA include the requirement that insurance companies cannot deny coverage to kids with pre-existing conditions, and that they cannot enforce lifetime caps for coverage, advocates said. Children under 26 can remain on their parents’ health insurance plans, and beginning in 2014, former foster children can stay on Medicaid until the age of 26, pointed out Sophie Arao-Nguyen, executive director of the advocacy group Family Voices.

But equally important for children under the ACA, Guyer said, is the federal government’s program to extend Medicaid to low-income people who earn up to a certain amount above the federal poverty level. As many as 5 million of those eligible under the new guidelines are parents, according to a recent study by the Kaiser Family Foundation.

“When parents have coverage, it means they don’t have untreated conditions that make it harder for them to be good parents,” Guyer said.

Tolbert agreed.

“We know that children are more likely to be covered when their parents are also covered,” Tolbert said. A lot of children who are eligible for the programs do not sign up, either because their parents don’t know their kids are eligible, or because there are other barriers to participation which could be reduced if the parents were covered along with their kids, Tolbert said.

“There are a whole host of other benefits that would accrue to children if their parents have access to health coverage,” Tolbert said.

The federal government was expected to spend up $443 billion on the expansion of Medicaid from 2014 to 2019, compared to a combined total of $21.1 billion for all states and the District of Columbia, according to the Kaiser Family Foundation. But even so, some states regard the expansion as an additional burden, Tolbert said.

It was too early to predict which states would choose not to participate in the Medicaid expansion, as they would be balancing a complex set of considerations before they made a decision, researchers and advocates agreed.

While some states may oppose the program for ideological reasons, they would be turning down a lot of federal money, Dorn said. And their residents would be paying higher payroll taxes to pay for Medicaid without getting the benefits enjoyed by residents of other states that had chosen to participate, Dorn said.

“If they’re shelling out the money they probably want their state to bring in the benefits of that expansion,” Dorn said.