Economic Snapshot | Health

Children’s health insurance at risk

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Snapshot for October 19, 2005.

Children’s health insurance at risk

An important source of health insurance for children is dependent coverage through their parents’ employer.  But in recent years, there has been a substantial decline in employer-provided health insurance for children.  In fact, from 2000 to 2004, children fared the worst of any group in terms of declines in employer-provided health coverage.  Fortunately, existing government insurance (i.e., Medicaid and State Children’s Health Insurance Programs) increased enough to offset the sharp decline (Figure A).  The percent of children covered by employer-provided health insurance fell from 65.6% to 60.8%, while the percent of children covered by Medicaid/SCHIP increased from 20.9% to 26.9%.  If the percent of children covered by employer-provided coverage had remained constant between 2000-04, 3.5 million more children would have been covered through the employer system.

Employment-based health insurance and Medicaid/SCHIP, children under 18

It’s remarkable that more children did not fall into the ranks of the uninsured during this period.  However, children’s health insurance faces more risks on two fronts.  While employer-provided insurance continues to decline, discussions are underway to reduce the tax incentives for employers to provide such coverage.1  Additionally, many states are facing fiscal difficulties and pending legislation at the federal level will substantially cut the very programs, Medicaid and SCHIP, that have kept millions of children from losing coverage altogether.  Any efforts to weaken the employer system without strengthening the public one will put more children at risk of losing coverage and, therefore, access to adequate health care.

More on the decline of employer-provided health insurance and the transition from private to public insurance will be available in an October 20 Briefing Paper from Elise Gould.

This week’s Snapshot was written by EPI economist Elise Gould with technical assistance from Jin Dai.

1. Rosenbaum, David E. 2005. “Tax panel says popular breaks should be cut.” New York Times. pA1. October 12.

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