Precarious as the recession was for most Americans, it was particularly bad for children with special health care needs. A new study published in Health Affairs suggests that out-of-pocket spending on children with special health care needs in families with private health insurance decreased during the recession from 2007 to 2009, dipping from $774 to $626.
To put this decrease in spending in context, in 2008, while children with special health care needs only composed about 17.9 percent of all children, they represented about 47.6 percent of all health care expenditures for children. In other words, children with special heath care needs had—and have—a lot more medical needs than the rest of the population of children.
When we look at the overall expenditure trend during that same period for privately insured individuals under 65, we also see a dip in out-of-pocket spending, though not as large. This decrease in overall spending for individuals indicates that households across the United States could have been reducing their use of health services to save money during that time.
How does this relate to the current policy environment if the recession is officially over? Well, first, any recovery we may be experiencing is sluggish, meaning that many families are still struggling. Second, the sheer fact that an economic climate can determine whether people spend on services they may require, especially in the case of children with special health care needs, should prompt policy makers to ensure that people don’t scrimp on health care during tough times.
As it turns out, there are policies in the Affordable Care Act that addresses this problem. The Medicaid expansion would extend coverage to families with incomes up to 138 percent of the poverty level. This step would likely mean that out-of-pocket expenses for families with children with special health care needs would be reduced.
Many states, though, are refusing to expand their programs because their governors are not fans of the president. This purely partisan strategy, coupled with the uncertain future of other initiatives such as the Children’s Health Insurance Program (CHIP), currently funded only through 2015, may mean that more children are left vulnerable and more families bear the out-of-pocket expense burden.
My colleague Greg Anrig here at The Century Foundation has argued for federalizing Medicaid because so many states have refused to expand their Medicaid programs. I would have to concur that if states are choosing not to expand their Medicaid programs and the end is in sight for CHIP, it is time to have a more centralized approach to guarantee that children with special health care needs are getting all the services they require, regardless of the state of the economy.