Underinsurance among Children in the United States

By Michael D. Kogan, Ph.D., Paul W. Newacheck, Dr.P.H., Stephen J. Blumberg, Ph.D., Reem M. Ghandour, Dr.P.H., Gopal K. Singh, Ph.D., Bonnie B. Strickland, Ph.D., and Peter C. van Dyck, M.D., M.P.H.
The New England Journal of Medicine
August 25, 2010



Recent interest in policy regarding children’s health insurance has focused on expanding coverage. Less attention has been devoted to the question of whether insurance sufficiently meets children’s needs.


We estimated underinsurance among U.S. children on the basis of data from the 2007 National Survey of Children’s Health (sample size, 91,642 children) regarding parents’ or guardians’ judgments of whether their children’s insurance covered needed services and providers and reasonably covered costs. Data on adequacy were combined with data on continuity of insurance coverage to classify children as never insured during the past year, sometimes insured during the past year, continuously insured but inadequately covered (i.e., underinsured), and continuously insured and adequately covered. We examined the association between this classification and five overall indicators of health care access and quality: delayed or forgone care, difficulty obtaining needed care from a specialist, no preventive care, no developmental screening at a preventive visit, and care not meeting the criteria of a medical home.


We estimated that in 2007, 11 million children were without health insurance for all or part of the year, and 22.7% of children with continuous insurance coverage — 14.1 million children — were underinsured. Older children, Hispanic children, children in fair or poor health, and children with special health care needs were more likely to be underinsured. As compared with children who were continuously and adequately insured, uninsured and underinsured children were more likely to have problems with health care access and quality.


The number of underinsured children exceeded the number of children without insurance for all or part of the year studied. Access to health care and the quality of health care are suboptimal for uninsured and underinsured children. (Funded by the Health Resources and Services Administration.)

From the Discussion

We found that inadequate coverage of charges was far and away the most common source of underinsurance. We also found that children enrolled in private plans were more than three times as likely as their counterparts in public plans to have inadequate coverage of charges. This dramatic difference is probably the result of federal rules that permit only very limited cost sharing under Medicaid and modest cost sharing under the Children’s Health Insurance Program.



Treating Underinsurance

By James M. Perrin, M.D.
Editorial, The New England Journal of Medicine
August 25, 2010

Health care reform, through the Patient Protection and Affordable Care Act of 2010, may improve access to needed health care services for people with chronic health conditions, including children. Key private insurance reforms, including the removal of provisions imposing lifetime limits or unreasonable limits on annual benefit, the removal of discriminatory premium rates, guaranteed availability of coverage, and dependent coverage for young people up the age of 26 years, may go a long way toward improving coverage for Americans and lowering out-of-pocket costs.

However, the growth in child and adolescent disability, combined with the problem of underinsurance and its effects on the quality of care and access to care, also highlights gaps that will remain in public insurance coverage even after the institution of safeguards affecting private coverage. The basic Medicaid program, unlike Medicare, includes long-term care benefits, such as care at home or in nursing homes and specialized therapies, and it serves as a vital source of financing for nursing home care (about 41% of current total nursing home support). The assumption that most children are healthy, however, has led policymakers to limit long-term care and coverage of a number of other benefits for chronic conditions in other programs for children. SCHIP provided a less generous benefit package — and excluded coverage of services for many chronic conditions (e.g., respiratory therapy, speech and language services, and home-based services) on the basis of the belief that the SCHIP population would not need such benefits. Research conducted since the enactment of SCHIP has indicated that substantial numbers of enrolled children have chronic conditions and could benefit from these services.

The Affordable Care Act calls for a major expansion in Medicaid, especially to provide insurance for a large number of currently uninsured and ineligible adults — that is, those under 65 years of age who have incomes below 133% of the federal poverty line (an estimated 12 million to 17 million people). Here, too, the benefit package will resemble the SCHIP (now CHIP) benefit, with an emphasis on coverage of care for acute conditions and less generous coverage of long-term care. Yet the members of the low-income adult population who will become eligible under this Medicaid expansion include substantial numbers of people with chronic conditions, especially mental health conditions. Here, too, for cases in which long-term care is needed, the Medicaid expansion may leave many newly insured people underinsured. For those instances in which the major epidemics of chronic conditions among adolescents have already begun to affect the young adult population, it is unlikely that many of these young people, even with their new Medicaid coverage, will receive the coverage they need for long-term care.



By Don McCanne, MD

Being underinsured often results in the same or similar adverse outcomes as not being insured at all. This study demonstrates that the problem of underinsurance amongst children is even more widespread than being uninsured. Does the Patient Protection and Affordable Care Act (PPACA) adequately address this shameful injustice?

PPACA does expand coverage for children through the individual mandate to purchase private insurance, though this study demonstrates that private insurance plans were three times as likely as public insurance plans to have inadequate coverage of charges. Thus PPACA, while reducing the numbers who are uninsured, actually increases the incidence of underinsurance. Most will still be insured through private employer-sponsored plans. For those purchasing their plans through the exchanges, the subsidies will provide some relief but still will not be not adequate to eliminate underinsurance.

PPACA also expands Medicaid, though primarily for adults. Although Medicaid and CHIP cover out-of-pocket expenses better than do the private plans, the editorial by James Perrin explains how lower-income individuals in these programs may still be underinsured. This is particularly true of those with chronic conditions who may need long-term care.

An appropriately designed single payer system eliminates the problem of underinsurance by eliminating significant cost sharing for all appropriate health care services. The efficiencies and policies of the single payer model create enough savings to pay these costs equitably without increasing our national health expenditures.

As long as we remain content with merely tweaking PPACA, we will continue to live in a society that tolerates exposing individuals and families to the hardships created by underinsurance or by having no insurance at all. Certainly we must be a better nation than that.

This article is re-printed with permission from pnhp.org.