June 2019 | Issue Brief How Do Medicaid/CHIP Children with Special Health Care Needs Differ from Those with Private Insurance? MaryBeth Musumeci and Priya Chidambaram Key Findings Medicaid and CHIP covered about half (47%) of the 13.3 million children with special health care needs in 2017. These children require medical and long-term care services due to intellectual/developmental disabilities, physical disabilities, and/or mental health disabilities. Medicaid/CHIP is the sole source of coverage for 39% of these children, and another 8% have Medicaid/CHIP to supplement their private coverage. Medicaid plays a key role for children with special health care needs by making coverage affordable and covering services that private insurance typically does not. This issue brief compares key characteristics of Medicaid/CHIP-only children with special health care needs to those with both public and private insurance, private insurance only, and those who are uninsured. For example:  Medicaid/CHIP children with special health care needs are significantly more likely to live in low income families compared to those with private insurance only. Over eight in 10 (83%) Medicaid/CHIP-only children with special health care needs live in families with incomes below 200% of the federal poverty level (less than $42,660/year for a family of three in 2019), compared to less than two in 10 (17%) of those with private insurance only.  Medicaid/CHIP children with special health care needs are significantly more likely to have multiple health conditions and to be in poorer health compared to those with private insurance alone, with children with both Medicaid/CHIP and private insurance having the greatest needs. For example, children with special health care needs with both Medicaid/CHIP and private insurance (50%) are twice as likely to have four or more functional difficulties compared to those with private insurance alone (25%). Medicaid/CHIP fills in gaps in private insurance and makes coverage affordable for these children.  Medicaid/CHIP children with special health care needs are more likely to report that their coverage is affordable compared to those with private insurance alone. For example, those with Medicaid/CHIP only are four times as likely (78%) to report that their out-of-pocket health care costs are always reasonable compared to those with private insurance alone (19%). Over half (53%) families of Medicaid/CHIP-only children with special health care needs find it somewhat or very often hard to cover basic needs like housing or food since their child’s birth, compared to a fifth (19%) of those with private insurance only. Introduction Medicaid and CHIP cover about half (47%, Figure 1 or about 6.1 million) of children with Health insurance status of children with special special health care needs in the U.S. as of health care needs, 2017 Uninsured 2017 (Figure 1).1 Box 1 below describes 4% Medicaid/CHIP and these children. Medicaid or CHIP is the Private Insurance 8% sole source of coverage for 39% of these Total Private Insurance children. Another 8% have Medicaid/CHIP Only 49% Medicaid/CHIP to supplement private insurance. This 47% Medicaid/CHIP Only issue brief compares the demographics, 39% health status, access to care, and coverage affordability of Medicaid/CHIP Total = 13.3 million children with children with special health care needs to special health care needs those with private insurance and those NOTES: Includes non-institutionalized children ages 0-17. Totals may not sum to 100% due to rounding. SOURCE: Kaiser Family Foundation analysis of the 2017 National Survey of Children’s Health, Topical File. who are uninsured. Medicaid plays a key role for children with special health care needs. It makes coverage affordable by limiting cost-sharing and protecting children from high out-of-pocket costs. Medicaid covers services that private coverage typically does not, including long-term services and supports and Early Periodic Screening Diagnostic and Treatment (ESPDT) services, a comprehensive benefit package of physical and behavioral health services. In addition to covering low income children, states can adopt optional pathways to expand Medicaid coverage for children with significant disabilities. More details about Medicaid’s role for children with special health care needs are included in a companion brief. Proposals that would cap and reduce federal Medicaid funding may pose a particular risk to children with special health care needs and their providers. Although efforts to repeal and replace the Affordable Care Act (ACA) and cap federal Medicaid funding through a block grant or per capita cap were narrowly defeated in Congress in 2017, some states, such as Utah and Tennessee, recently passed legislation to seek capped federal Medicaid funding through a Section 1115 waiver. While all of these state proposals may not include children with special health care needs, Tennessee’s legislation does include this population.2 The Centers for Medicare and Medicaid Services reportedly is considering issuing guidance to states on Section 1115 waivers that would cap federal Medicaid financing. A program-wide federal financing cap also is proposed in President Trump’s FY 2020 budget.3 Depending on how they are structured, these policies could have consequences on Medicaid coverage, services, and access to care for children with special health care needs. How Do Medicaid/CHIP Children with Special Health Care Needs Differ from Those with Private Insurance? 2 Box 1: Who are Children with Special Health Care Needs? As defined by the U.S. Department of Health and Social Services, children with special health care needs “have or are at increased risk for chronic physical, developmental, behavioral or emotional conditions and also require health and related services of a type or amount beyond that required by children generally.”1 Their needs arise from a range of conditions such as autism, Down syndrome, and other intellectual and developmental disabilities; physical disabilities such as cerebral palsy, spina bifida, and muscular dystrophy; mental health needs such as depression and anxiety; and complications arising from premature birth. They may need nursing care to live safely at home with a tracheotomy or feeding tube; attendant care to develop community living skills; medical equipment and supplies; mental health counseling; and/or regular physical, occupational, speech or other therapies to address developmental delays. They may have difficulty with bodily functions, such as breathing, swallowing, or chronic pain; difficulty with daily activities such as self-care, mobility, learning, or communicating; and/or emotional or behavioral difficulties, such as anxiety, depression, or difficulty making friends. Socio-Demographics Among the 13.3 million children with special health care needs, those who have Medicaid/CHIP are significantly more likely to live in low income families compared to those with private insurance only. Over eight in 10 (83%) Medicaid/CHIP-only children with special health care needs live in families with incomes below 200% of the federal poverty level (FPL, less than $42,660/year for a family of three in 2019), compared to 17% of those with private insurance only. Over half (55%) of children with special health care needs who have both Medicaid/CHIP and private insurance live in a family with income below 200% FPL (Figure 2). Figure 2 Household income of children with special health care needs by coverage status, 2017 4% 13%* 13% 23%** 49%* 32%* 32% 24% 40% 31% 34%* 51% 11%* 22%* 15%* 6%* Medicaid/CHIP Only Medicaid/CHIP and Private Insurance Only Uninsured Private Insurance 0-99% FPL 100-199% FPL 200-399% FPL 400% FPL+ NOTES: Includes non-institutionalized children with special health care needs ages 0-17. *Indicates statistically significant difference from the Medicaid/CHIP Only population at the p < 0.05 level. ** Estimates do not meet minimum standards for reliability SOURCE: Kaiser Family Foundation analysis of the 2017 National Survey of Children’s Health, Topical File. How Do Medicaid/CHIP Children with Special Health Care Needs Differ from Those with Private Insurance? 3 Medicaid/CHIP-only children with Figure 3 special health care needs are Race/ethnicity of children with special health care significantly more likely to be a needs by coverage status, 2017 9% 6%** 9% member of a racial or ethnic minority 8%** 21% 16%* group compared to those with private 30% 29% 11%* insurance only. Nearly two out of three 28% (65%) children with special health care 27% 32% needs with private insurance alone are 65%* non-Hispanic white, compared to just over 35% 45% 31% one in three (35%) Medicaid/CHIP-only children with special health care needs Medicaid/CHIP Only Medicaid/CHIP and Private Insurance Only Uninsured Private Insurance (Figure 3). Non-Hispanic White Non-Hispanic Black Hispanic Non-Hispanic Other Race NOTES: Includes non-institutionalized children with special health care needs ages 0-17. *Indicates statistically significant difference from the Medicaid/CHIP Only population at the p < 0.05 level. ** Estimates do not meet minimum standards for reliability SOURCE: Kaiser Family Foundation analysis of the 2017 National Survey of Children’s Health, Topical File. Health Status Medicaid/CHIP children with special health care needs are significantly more likely to have multiple chronic conditions compared Figure 4 to those with private insurance only. Health status of children with special health care Almost 4 in 10 (39%) Medicaid/CHIP-only needs by coverage status, 2017 children with special health care needs Share of children reporting: have four or more chronic conditions, 50% compared to less than a quarter (23%) of 39% those with private insurance only (Figure 4). Some of the chronic conditions 29% 23%* reported by children with special health care needs include autism, intellectual 7% 8% 3% disability, asthma, depression, anxiety, N/A 4+ Chronic Conditions Health fair or poor attention deficient hyperactivity disorder, Medicaid/CHIP Only Medicaid/CHIP and Private Insurance Private Insurance Only Uninsured cerebral palsy, cystic fibrosis, diabetes, NOTES: Includes non-institutionalized children with special health care needs ages 0-17. N/A: Estimates do not meet minimum standard for reliability *Indicates statistically significant difference from the Medicaid/CHIP Only population at the p < 0.05 level. muscular dystrophy, brain injury, heart SOURCE: Kaiser Family Foundation analysis of the 2017 National Survey of Children’s Health, Topical File. conditions, and epilepsy. As a result of their poorer health, Medicaid/CHIP children are significantly more likely to have multiple health care service needs during the course of a year compared to those with private insurance only. Medicaid/CHIP-only children with special health care needs are significantly more likely (24%) to require three or more health care services, such as specialist care; prescription medication; speech, occupational, or behavioral therapy; or mental health treatment or counseling, compared to those with private insurance alone (15%) (Figure 5). How Do Medicaid/CHIP Children with Special Health Care Needs Differ from Those with Private Insurance? 4 Medicaid/CHIP children are significantly more likely to have their daily activities affected by their health compared to those with private insurance only. Medicaid/CHIP-only children with special health care needs are nearly twice as likely (49%) to have four or more functional difficulties compared to those with private insurance alone (25%). Figure 5 Functional difficulties experienced by Health needs of children with special health care children with special health care needs needs by coverage status, 2017 include problems with bodily functions, Share of children reporting: such as breathing, swallowing, or chronic 49% 50% 47%* physical pain; activities or participation, 40%* 35% such as self-care, mobility, learning, or 30% 33% 24% 25%* communicating; and emotional or 22% 18%* 15%* behavioral factors, such as anxiety, depression, or making friends. Medicaid/CHIP-only children with special 3+ service needs 4+ functional difficulties Health Conditions usually or always affect daily activities somewhat or a great deal health care needs are significantly more Medicaid/CHIP Only Medicaid/CHIP and Private Insurance Private Insurance Only Uninsured likely (30%) to have health conditions that NOTES: Includes non-institutionalized children with special health care needs ages 0-17. *Indicates statistically significant difference from the Medicaid/CHIP Only population at the p < 0.05 level. usually or always affect their daily SOURCE: Kaiser Family Foundation analysis of the 2017 National Survey of Children’s Health, Topical File. activities somewhat or a great deal compared to those with private insurance only (18%) (Figure 5). Children with special health care needs who have both Medicaid/CHIP and private insurance have the greatest health care needs compared to other groups. Forty percent of those with both Medicaid/CHIP and private insurance have three or more health care service needs in the course of a year. Nearly half (47%) of this group have health conditions that usually or always affect their daily activities somewhat or a great deal (Figure 5). Figure 6 As a result of their greater health needs Educational impact on children with special health and functional limitations, care needs by coverage status, 2017 Share of children reporting: Medicaid/CHIP children with special 38% 35% health care needs are significantly 30% more likely to have their education 26%* impacted by their health status. Those with Medicaid/CHIP only (38%) are 12% 9% significantly more likely to have a current special education plan compared to those N/A N/A with private insurance alone (26%) (Figure Currently has special education plan Missed 11 or more days of school in past 12 months due to illness or injury (ages 6-17) 6). Medicaid/CHIP Only Medicaid/CHIP and Private Insurance Private Insurance Only Uninsured NOTES: Includes non-institutionalized children with special health care needs ages 0-17. N/A: Estimates do not meet minimum standard for reliability *Indicates statistically significant difference from the Medicaid/CHIP Only population at the p < 0.05 level. SOURCE: Kaiser Family Foundation analysis of the 2017 National Survey of Children’s Health, Topical File. Access to Care Despite their greater needs, Medicaid/CHIP-only children with special health care needs are significantly more likely than those with private insurance alone to report that their coverage How Do Medicaid/CHIP Children with Special Health Care Needs Differ from Those with Private Insurance? 5 meets their needs. For example, Medicaid/CHIP-only children with special health care needs (81%) are significantly more likely than those with private insurance only (55%) to report that their coverage is adequate. Just under two-thirds (62%) of children with both Medicaid/CHIP and private insurance report that their coverage is adequate, perhaps due to this group’s greater health needs. Medicaid/CHIP-only children with special health care needs also are significantly more likely to report that their insurance always allows them to see all Figure 7 needed health care providers, Insurance adequacy among children with special compare to those with private health care needs by coverage status, 2017 insurance alone (78% vs. 69%). Share of children reporting: 81% While access to mental health 78% 69%* services can be challenging 62%* 59%* 62% 55%* across payers due to provider 50% shortages, Medicaid/CHIP-only 36%* children with special health care needs (62%) are significantly more likely to report that their insurance Current insurance is adequate Current insurance always Current insurance always always meets their mental or allows child to see needed meets child's mental or health providers behavioral needs behavioral needs compared to Medicaid/CHIP Only Medicaid/CHIP and Private Insurance Private Insurance Only those with private insurance alone NOTES: Includes non-institutionalized children with special health care needs ages 0-17. *Indicates statistically significant difference from the Medicaid/CHIP Only population at the p < 0.05 level. (36%) (Figure 7). SOURCE: Kaiser Family Foundation analysis of the 2017 National Survey of Children’s Health, Topical File. Medicaid/CHIP children with special health care needs have high rates of access to care; their access is not as high as those with private insurance alone but significantly better than those who are uninsured. Over four in five (81%) Medicaid/CHIP-only children with special health care needs report a usual source of care when sick Figure 8 compared to 88% of those with Access to care for children with special health care private insurance alone. The rates needs by coverage status, 2017 for access to a usual source of Share of children reporting: preventive care (90% for 97%* 97%* 96%* 92%* Medicaid/CHIP-only vs. 97% for 89%* 88%* 90% 81% 83% 85% 77% private insurance only) and for at 62%* least one preventive visit in the last year (85% for Medicaid/CHIP-only vs. 92% for private insurance only) are high for both groups. Medicaid/CHIP children with Usual source of care when sick Usual souce of preventative At least one preventative visit in care the last 12 months special health care needs also Medicaid/CHIP Only Medicaid/CHIP and Private Insurance Private Insurance Only Uninsured experience significantly better NOTES: Includes non-institutionalized children with special health care needs ages 0-17. Emergency room is excluded from usual source of care. *Indicates statistically significant difference from the Medicaid/Other Public Only population at the p < 0.05 level. access to care when sick SOURCE: Kaiser Family Foundation analysis of the 2017 National Survey of Children’s Health, Topical File. compared with those who are uninsured (Figure 8). How Do Medicaid/CHIP Children with Special Health Care Needs Differ from Those with Private Insurance? 6 Affordability Medicaid/CHIP children with special health care needs are significantly more likely to report that their coverage is affordable compared to those with private insurance alone. Medicaid/CHIP-only children with special health care needs (78%) are more than four times as likely to report that their out-of- pocket health care costs are always reasonable compared to those with private insurance alone (19%) (Figure 9). Insurance affordability may be a Figure 9 particular concern for families of Affordability for children with special health care Medicaid/CHIP children with special needs by coverage status, 2017 health care needs because they are Share of children reporting: significantly more likely to have 78% difficulty covering basic household 53% needs compared to those with 49%* 48% 37% private insurance only. Families of Medicaid/CHIP-only children with 19%* 19%* 12% special health care needs are almost N/A three times as likely (53%) to find it Out-of-pocket costs are always Families paid $1000 or more in Somewhat or very often find it reasonable out-of-pocket medical expenses hard to cover basic needs since somewhat or very often hard to cover child born basic needs like housing or food since Medicaid/CHIP Only Medicaid/CHIP and Private Insurance Private Insurance Only NOTES: Includes non-institutionalized children with special health care needs ages 0-17. N/A: Estimates do not meet their child’s birth compared to those minimum standard for reliability *Indicates statistically significant difference from the Medicaid/Other Public Only population at the p < 0.05 level. SOURCE: Kaiser Family Foundation analysis of the 2017 National Survey of Children’s Health, Topical File. with private insurance alone (19%) (Figure 9). For an example of how Medicaid helps make private coverage affordable for children with special health care needs, see Gabriel’s story in Box 2 below. Insurance affordability also is Figure 10 important because the demands of Impact on family’s ability to work among children caring for children with special health with special health care needs by coverage status, care needs can impede their families’ 2017 Share of children reporting: ability to work, an outcome that is 21% 20% 20% significantly more likely among 15% Medicaid/CHIP children with special 12%* health care needs compared to those with private insurance only. 5%* Medicaid/CHIP-only children with special health care needs are nearly twice as N/A N/A Reduce work hours or stop working due to Spend 5 or more hours/week providing child's likely (20%) to live in families who had to child's health health care at home Medicaid/CHIP Only Medicaid/CHIP and Private Insurance Private Insurance Only Uninsured reduce their work hours or stop working NOTES: Includes non-institutionalized children with special health care needs ages 0-17. N/A: Estimates do not meet due to their child’s health needs, minimum standards for reliability. *Indicates statistically significant difference from the Medicaid/Other Public Only population at the p < 0.05 level. SOURCE: Kaiser Family Foundation analysis of the 2017 National Survey of Children’s Health, Topical File. compared to those with private insurance alone (12%) (Figure 10). How Do Medicaid/CHIP Children with Special Health Care Needs Differ from Those with Private Insurance? 7 Families of Medicaid/CHIP children with special health care needs may be less able to work because they are significantly more likely to devote time to meeting their child’s health needs compared to those with private insurance only. They are three times as likely (15%) to have family members who spend five or more hours per week providing their health care at home compared to those with private insurance alone (5%) (Figure 10). Box 2: Gabriel, age 4, Louisiana Gabriel was born prematurely at 27 weeks and spent a little over his first year of life in the hospital. When he was ready for discharge, his parents were told that he would have to go to a nursing home because the services that he needed to be safely cared for at home were not offered by his private insurance through his father’s job as a tugboat pilot. Medicaid covers these services, and because Gabriel qualified based on the extent of his health care needs, he was able to come home. Although Gabriel has significant developmental delays and chronic lung diseases, his mother, Jessica, says he is “thriving at home.” Jessica attributes Gabriel’s progress to the Medicaid services he receives to care for his tracheotomy and gastrostomy tube and monitor his oxygen supply and ventilator. Gabriel requires close attention because he can decompensate quickly, and Jessica credits his Medicaid home nursing services with helping him stay as healthy as possible – he has only been hospitalized for illness once since his discharge. He plays outside with the support of his direct care workers, and Medicaid provided a generator that enabled him to remain at home during recent flooding and power outages instead of going to a shelter or hospital. Jessica says the private insurance copayments for all of Gabriel’s care would be “outrageous” without Medicaid. Medicaid helps with medical supplies, prescriptions, visits with seven specialists and a pediatrician, and eight outpatient occupational and speech therapy sessions per month. Medicaid also supplements Gabriel’s special education services, which, for example, do not address feeding issues. Jessica studied social work in college and says she was used to helping connect others with resources but never thought that she would be “on the other end of needing support” herself. She believes that Medicaid helps Gabriel to “reach his maximum potential” and maintain his quality of life. How Do Medicaid/CHIP Children with Special Health Care Needs Differ from Those with Private Insurance? 8 Conclusion Medicaid/CHIP children with special health care needs experience greater health needs and have coverage that is more affordable compared to those with private insurance alone. Their families are more likely to have to limit their work hours or stop working as a result of their health and more likely to devote time providing or coordinating their health care. In addition to filling gaps in private insurance and making coverage affordable, Medicaid is the sole source of coverage for many children with special health care needs in low and middle income families. Medicaid also fills in the gaps in private insurance and makes coverage affordable for children with some of the greatest health care needs. Medicaid/CHIP children with special health care needs have high rates of access to care and experience significantly better access to care compared with those who are uninsured. Proposals to cap and reduce federal Medicaid funding may pose a particular risk to children with special health care needs because these children use services more intensively, and often incur greater costs, compared to other children Although efforts to repeal and replace the Affordable Care Act (ACA) and cap federal Medicaid funding through a block grant or per capita cap were narrowly defeated in Congress in 2017, some states recently passed legislation to seek capped federal Medicaid funding through a Section 1115 waiver, and at least one state (Tennessee) plans to apply this cap to children with special health care needs. A key consideration for families of children with special health care needs, their providers, and policymakers at the federal and state level is how proposed changes could affect Medicaid’s role for children with special health care needs. Endnotes 1 An estimated 13.3 million children, or 18% of all children in the U.S., have special health care needs. Kaiser Family Foundation analysis of the 2017 National Survey of Children’s Health, Topical File. 2 Tenn. General Assembly, Conference Committee Report on H.B. 1280/S.B. 1428 (May 17, 2019), http://wapp.capitol.tn.gov/apps/BillInfo/Default.aspx?BillNumber=HB1280. 3 Kaiser Family Foundation, Medicaid Financing: The Basics (March 2019), https://www.kff.org/medicaid/issuebrief/medicaid-financing-the-basics/. How Do Medicaid/CHIP Children with Special Health Care Needs Differ from Those with Private Insurance? 9