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NewsFlash: September 20, 2007

The Many Ways California Pays for Uninsured Children

Californians shouldered the cost of over 1.2 million of the state’s children who had no health coverage last year. That’s the population of San Diego, the state’s second largest city.  As the employment-based health coverage system in California unravels, the ranks of uninsured children inflict damaging repercussions on the public and private sectors.

Those repercussions are explored in the briefing paper, California kids lose employment-based coverage, by Elise Gould, released today by the Economic Policy Institute. Gould looks at the impact that uninsured children have on the public insurance system, the community, and businesses.

As the employer-provided health insurance industry tightens its belt, it is not just children in low-income families losing health insurance coverage.  While child health coverage dropped by 6.4 percentage points for families in the poorest fifth of the income scale (from 2000 to 2006), children in families from the upper-middle fifth of the income scale lost employer-provided coverage by a shocking 9.1 percentage points.

“It is clear that declines in employment-based coverage require an expansion of California’s public coverage system,” said Gould.  “If California could implement a well-funded efficient public insurance system, it could be a model for the nation.”

When children have no health coverage, a spiral of socially and economically damaging consequences occurs.  Gould’s research shows Californians pay for the 1.2 million uninsured children in many different ways, with:

• increased mortality;
• increased personal bankruptcy;
• increased mental retardation and poor school performance;
• lower work productivity;
• increased absenteeism and turnover;
• and, higher premiums for the insured.

“Families, communities, and businesses operate better with an insured population,” said Gould. “A long-term solution that takes the best from employer-based and public insurance systems would ensure that all children have quality, affordable health coverage.”

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