Premiums for Medicaid could drop coverageNews added by Benefits Pro on February 24, 2016

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By Jack Craver

Even raising premiums slightly for Medicaid or the Children’s Health Insurance Program could dramatically reduce access to health care for poor children, suggests a recent report.

“Public insurance premiums often increase disenrollment from public insurance and may have unintended consequences on overall coverage for low-income children,” concludes the study, which was lead by Brendan Saloner of the Johns Hopkins Bloomberg School of Public Health in Baltimore.

No kidding, one might say. Health care becomes less popular when it’s not free.

But the drop in coverage rates that the authors projected highlights the tenuous line that policymakers walk when trying to balance the cost of health programs between beneficiaries and taxpayers.

The report is of particular salience in a number of states that have sought waivers from the federal government that allow them to expand Medicaid in ways not originally envisioned by the Patient Protection and Affordable Care Act.

While five states charged premiums for Medicaid in 2013, Republican governors in some states have insisted that they be able to charge beneficiaries of the Medicaid expansion premiums for their care, with those with higher incomes paying more. Indiana, Arkansas and Iowa are examples of such states.

Premiums are even more common for CHIP. Thirty states charge premiums, according to Reuters.

The benefit of premiums likely do not outweigh the drawbacks, the report suggests. “Little is known about effects of premiums on spending or access to care, but one study reveals premiums are unlikely to yield substantial revenue,” wrote the authors.

“When families face these difficult choices, some may decide to drop public insurance, and in some cases the child may then become uninsured,” Saloner told Reuters. “This can be problematic because we know that children that lack health insurance have worse access to care than those on Medicaid and CHIP, and sometimes do not receive recommended health services like vision care, vaccinations or mental health care.”

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