By Michael Ollove

The number of kids enrolled in Medicaid and the Children’s Health Insurance Program (CHIP) — two government health plans for the poor — fell by nearly 600,000 in the first 11 months of 2018, a precipitous drop that has puzzled and alarmed many health policy analysts, while several states say it reflects the good news of an improving economy.

Enrollment in the two programs decreased by 599,000 children in the 48 states from which the U.S. Centers for Medicare and Medicaid Services (CMS) has data from December 2017 to November 2018, the last month for which numbers are available. At the beginning of that period, Medicaid and CHIP enrolled nearly 36 million children in those states.

Missouri (8.1 percent), Idaho (6.7 percent) and Utah (6 percent) experienced the biggest percentage drops in kids enrolled.

“I'm sure Idaho's strong economy is playing a role,” enabling families to leave public health programs, said Niki Forbing-Orr, spokeswoman for the Idaho Department of Health and Welfare, in an email to Stateline. She also cited other factors, such as the department not being able to reach beneficiaries to alert them it was time to re-enroll. Some, she said, may have simply moved out of state.

In total numbers, Texas rolls tumbled the most — by more than 134,000 kids — followed by California with almost 130,000. Texas didn’t respond to questions about the decline, but California also ascribed the declining enrollment to that state’s strong economic growth.

That kind of large drop in child enrollment is unusual in the history of Medicaid and CHIP.

The percentage of uninsured children in the United States fell from 8.5 to 4.7 percent between 2010 and 2016, a period that included the implementation of the Affordable Care Act. But in 2017, the percentage climbed again in 33 states and the United States as a whole.

While experts seem uncertain about the cause, they too cite the possibility of the improving economy that might enable parents to leave government health plans. They say there are other likely causes, though, including actions by the Trump administration to undermine the Affordable Care Act, changes in data systems and immigrants’ fears of enrolling their children in public services.

Uncertainty about the status of the programs also may have played a role, analysts say. Congressional Republicans have sought cuts in Medicaid since President Donald Trump assumed office. And in 2017, Congress missed the deadline for reauthorizing CHIP funding by about four months, which prompted the state of Minnesota to start dipping in its own funds to continue the program. Other states, including Colorado and Virginia, sent letters to parents warning of the possible cessation of services.

Medicaid and CHIP had been steadily gaining coverage since the late 1990s, and more than a third of the nation’s children rely on one or the other for health coverage. Health policy analysts and advocates for low-income children say the decrease might be a sign that more kids are going without the health care they need.

“All kinds of warning lights are going off in my head,” said Tricia Brooks, a senior fellow at Georgetown University’s Health Policy Institute, who has blogged about the sudden drop in enrollment.

Not all analysts agree there is cause for concern. Edmund Haislmaier, a health policy expert at the conservative Heritage Foundation, for example, pointed out that the decrease is relatively small in programs that together enrolled nearly 35.4 million children as of November 2018.

“You’re talking about less than a 1.5 percent difference,” he said. “I would find it hard to make even a molehill out of that.”

A CMS spokesman said questions about the decline in child enrollment should be directed to the states.

Both Medicaid and CHIP are jointly financed by the federal government and the states to provide health care for the poor. CHIP was created in 1997 to extend health benefits to children in families whose income is above Medicaid eligibility levels but still relatively low.

Many analysts agree that an improving economy might explain some of the decrease. With employment rising, more families might be able to withdraw from Medicaid and CHIP and enroll in “Obamacare” plans or employer-sponsored health plans.

“While it’s hard to pinpoint, the economy has improved in this state, and that would be a reasonable factor,” said Matt Westerfield, communications officer for Medicaid in Mississippi, which recorded one of the largest percentage drops (5.8 percent) in kids in public health programs in 2018.

Ohio said that due to a glitch, the numbers reported by CMS for Ohio are wrong. CMS said child enrollment grew by about 60,000 in 2017, when it actually declined by 50,000 that year.

And it declined in the first 11 months of 2018 by about 41,000 rather than the reported 47,500.

In any case, Ohio Medicaid spokesman Tom Betti said that his department’s analysis and surveys of beneficiaries suggest that the declining child enrollment in the public health plans was good news.

“The vast majority are leaving because life is getting better for them,” he said, “but it doesn’t mean that any one individual isn’t having a struggle.” He acknowledged that some children are dropped because their parents aren’t able to successfully re-enroll them.

Missouri had the largest percentage decrease of enrolled kids in the first 11 months of 2018 at 8.1 percent, or 50,505 kids. In a letter to legislators this week, Patrick Luebbering, director of the family support division of the Missouri Department of Social Services, cited federal actions as one of the causes of the decline, including the Trump administration’s cuts in services to educate and assist consumers enrolling in health insurance. He also pointed to Congress’ repeal of fines for people who failed to enroll in health insurance.

Luebbering mentioned, too, the improving economy, as well as an antiquated data system that hampered beneficiaries in enrolling. That system is in the process of being updated.

The economy has steadily improved for a decade, but only after 2016 did the percentage of kids without health insurance increase. (The rate of those without insurance for the entire population also ticked up in 2017, although not nearly as much as it did for children.)

And the number of consumers — either as individuals or on behalf of families — buying plans on ACA markets fell by 900,000 between 2016 and 2018, perhaps indicating that large numbers of children leaving Medicaid and CHIP did not end up in Obamacare plans.

'Trouble on the Horizon?’

Child advocacy groups say they are deeply concerned about the trend continuing, particularly for poorer children.

“For medically underinsured families, Medicaid and CHIP are load-bearing beams in terms of maintaining health,” said Dennis Johnson, head of policy and advocacy for the Children’s Health Fund, a New York-based organization that advocates for better access to health care for poor children.

“Essentially, we have done a fairly magnificent job in this country over the last 10 years in terms of kids insured,” he said. “It’s the reversal of that trend that has us worried. We see trouble on the horizon.”

Johnson disputed the argument that the drop is insignificant. “Whether it’s 50,000 or 500,000, the consequences for those kids are real.”

Children with untreated conditions, such as obesity and asthma, suffer lifelong consequences, he said, including frequent school absences that can impair their education and future opportunities.

Experts point to several factors that might be depressing the numbers.

Many analysts point first to the uncertainty over the future of the Affordable Care Act since Trump became president.

Repeated but unsuccessful efforts by Republicans in Congress to repeal the ACA caused public confusion, which probably diminished enrollment in Medicaid, CHIP and Obamacare health insurance plans, said Joan Alker, executive director of the Center for Children and Families at Georgetown University. And Congress failed to meet deadlines to reauthorize funding for CHIP in 2017, which prompted several states to prepare for the program’s shutdown.

“There has been a lot of confusion out there among families,” Alker said.

Critics say other actions in Washington also likely contributed to declines in child enrollment in Medicaid and CHIP. The administration last year cut funding for navigators who helped consumers with enrollment, outreach and advertising that previously supported efforts to enroll people in Medicaid, CHIP and Obamacare policies.

In addition, Congress at the end of 2017 eliminated the penalty for people not enrolled in an insurance plan, a requirement under the ACA. All those actions, said Samantha Artiga, a health policy analyst for the Kaiser Family Foundation, likely resulted in “declining child enrollment in Medicaid and CHIP, as well as health insurance in general.”

Immigrant Fears

Many observers also cited the Trump administration’s crackdown on immigrants living in the United States without documentation. Undocumented immigrants whose American-born children would be eligible for Medicaid or CHIP might be unwilling to enroll them for fear of bringing federal immigration agents to their doorsteps.

“We have heard anecdotally from pediatricians, clinics, community health centers and navigators that parents are fearful of signing their kids up,” said Mike Odeh, director of health policy for Children Now, a child advocacy organization in California. “It’s had a chilling effect.”

The effect could grow if the Trump administration adopts its proposed “public charge” rule.

Currently, the United States can deny permanent resident status to lawfully present immigrants if they use public benefits, such as Temporary Assistance for Needy Families, known as food stamps, or Supplemental Security Income, the payments to children and adults with disabilities.

The Trump administration proposed late last year to also deny permanent status to green card holders who use food, housing and health benefits, including Medicaid and CHIP. The proposed rule is in the public comment phase now.

Some reasons for the declining numbers might be technological and inadvertent. The Affordable Care Act provided money to state Medicaid agencies to upgrade their data systems, which some are now doing. Those upgrades, Georgetown’s Brooks said, “have often resulted in renewal delays for a few months to get the kinks worked out and train the staff.” It’s unknown, though, how many children that might be affecting.

But some states also have made it harder to enroll in or renew the public health programs. They require in-person applications and multiple documents, such as consecutive months of pay stubs. Arkansas (where child enrollment fell by 0.7 percent in 2018) and Indiana (where there actually was a 0.5 percent increase in enrollment) have implemented work requirements in Medicaid, and at least 10 other states hope to follow suit, which will likely further diminish child enrollment in public health plans.

Analysts point to another possible contributing cause: While some states guarantee 12 months of continued enrollment in CHIP if a family’s income rises above eligibility levels — even if briefly — a number of states, including Arizona, Illinois, Michigan and Ohio, do not have such protections.

“A small and short-term bump in income can lead to a child’s losing health insurance,” said Jessie Mandle, senior health policy analyst for the Salt Lake City-based advocacy organization Voices for Utah Children.

Changes in Child Enrollment in Medicaid and CHIP, Dec. 2017 - Nov. 2018

Enrollment of children in Medicaid and the Children's Health Insurance Program (CHIP) fell by nearly 600,000 in the first 11 months of 2018. The biggest percentage drops were in Idaho, Missouri and Utah. Texas had the largest number of kids dropping off the rolls.