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In this article, the author will analyze the Patient Protection and Affordable Care Act (P.L. 111-148) through its changes and innovations, and how the act is going to address the problems of access, quality, and the cost of children's health care in the United States generally, and in Alaska in particular.

Children are a special sub-group of the population in every society. Their unique characteristics are important in relation to the health care system. They cannot get insurance by themselves. They cannot be completely responsible for their health status. They are not able to participate actively in policy-decision processes. However, they are the best investment for the future health of the nation, because they are the future! Finally, they are the best subjects for fostering healthy lifestyles and behavior. Thus, if we want to have a healthy population, we should take into consideration all of these facts and create the health care system that addresses access, quality, and cost of children's health care effectively and efficiently.

Access, quality, and cost are the main determinants of any health care system. An effective and efficient health care system for children should cover every child, provide equal access not only for treatment but also for prevention (immunization, screening, and health education programs), use multidisciplinary approaches (psychological and developmental services), and be school-based and family-centered. The question is, "How does the new legislation meets these requirements?"

 

PPACA contains several very important changes and innovations that address some of the issues above. They are:

We will discuss these in greater detail below.

Both programs together cover about 29 percent of all American children^[i]. This one-third of the youth population is more likely to have poor health status, be children with special care needs, and have disabilities.^[ii] These children cost much more for the system than healthy kids, but the Medicaid and CHIP programs manage this cost more successfully than private insurance does. For instance, Medicaid cost inflation during 2000-2003 was only 6.9 percent compared to private insurance sector's 12.6 percent.^[iii] It seems obvious that Medicaid and CHIP should be prolonged and expanded in order to provide access to health care for children excluded by private health insurance.The states do not have the right to eliminate Medicaid or CHIP and are required to keep the programs at the level of eligibility and scope of services that existed before the new regulation.

Under the current Medicaid rules, the federal floor is set at:

In turn, current CHIP regulation requires states to cover all children under 19 with family income below 150 percent of FPL through one of three options: expanding Medicaid (Alaska's choice), creating a state Children's Health Insurance Program, or combining Medicaid and CHIP.

The new regulation changes mostly Medicaid eligibility. By 2014, children under 19, pregnant women, parents, and childless adults with family income below 133 percent of FPL will be eligible for Medicaid. Additionally, it also will provide access to CHIP for children of state public employees that previously were only covered under a state employee health care plan if the parents could afford it.

The changes in Medicaid and CHIP eligibility actually will not provide access to health care for more youth, but they will address quality and cost of the services. First of all, children ages 6 to 19 with family income between 100 percent and 133 percent of FPL who are currently enrolled in CHIP (if their states have it) will be switched to Medicaid. Their families will not pay for their covered medical services at all because Medicaid rules prohibit any cost sharing while CHIP allows nominal sharing for families with income below 150 percent of FPL and not more than 5 percent for families' with income higher than 150 percent of FPL. If we take into consideration that all direct and indirect financing burdens due to children's health care problems might cost families close to 50 percent of income^[iv], these changes are definitely positive for children's health care.

Expansion of Medicaid for adults

The expansion of Medicaid eligibility for adults (including childless adults) with income up to 133 percent of FPL, will improve health care for children in three ways. Firstly, the Medicaid health plan will be more family-centered. This means the health care plan will be based on the fact that family is essential to children's health status, and a health plan should meet not only children's health care needs but also health care needs of their families as a whole.^[v] Secondly, it will eliminate some economic disparities between kids whose parents have insurance and those whose parents do not. Today, because of variation among the states, median Medicaid eligibility for youth is 235 percent of FPL; however, for working parents it is only 64 percent of FPL. For jobless parents it is even less -- 38 percent of FPL.^[vi] Research shows that insured children with uninsured parents are more likely to have some gaps in needed medical services and undelivered preventive services.^[vii] Finally, there is considerable discussion about reproductive health. Today, 47 percent of poor and 38 percent of near poor childless adults are uninsured. ^[viii] All these adults are potential parents in future. If as a society, we expect them to be responsible for their health and health of their future children, I believe we have to provide resources to them.

Health insurance exchanges

Those who are not eligible for Medicaid and CHIP will be eligible for a state exchange in 2014 that will provide health insurance to qualified children. The exchange rules require a cap for premiums and for out-of pocket spending, which ranges from 2 percent to 9.5 percent depending upon the level of income. Additionally, the government will provide cost-sharing subsidies for the exchange's beneficiaries. Moreover, the exchange will provide a public plan option, which the many analysts point to as a solution that better meets children's health care needs

However, Medicaid expansion and the exchanges won't be effective until 2014. How does the new legislation deal with protecting children right now? There are three approaches: prohibition of exclusion for pre-existing medical conditions, expanding dependent coverage up to age 26, and the establishment of a temporary high-risk pool.

Prohibiting exclusion of children with pre-existing medical conditions from health insurance

Children with poor health status are more likely to be uninsured. Starting September 2010, all children have to be enrolled in a health insurance plan regardless of any pre-existing conditions. However, while health insurance companies can't impose any exclusion on pre-existing conditions for children by September 2010, insurers may still impose the costs associated with these conditions because this will not be prohibited until 2014.^[ix] If the pre-existing conditions of a child result in a premium that a family cannot afford to pay, until 2014, health insurance companies may exclude the children indirectly.

Expanding dependent coverage up to age 26

Statistically, the population under age 26 is the least insured. These youth are still financially dependent on their parents in the majority of cases.  After September 23, 2010, insurance companies must formulate a plan to offer the additional coverage to older dependents, and that coverage must begin no later than July 1, 2011. Several insurance companies (Premera Blue Cross, Aetna Life Insurance Company, United HealthCare Insurance Company), agreed to cover dependents up to age 26 even before the September 23, 2010 deadline. ^[x]  At the same time, self-funded health plans, are not subject to this provision though such groups may voluntarily choose to do so. The children of these young people cannot be covered under their grandparents' health insurance plans, but they may qualify for Medicaid or CHIP. ^[xi] Another category of the youth population, children in foster care, will have this option in January 2014. ^[xii]

Establishment of a temporary high-risk pool

This pool will cover people with pre-existing medical conditions, and those who have been uninsured for at least six months until January 2014. In some states (including Alaska) these pools already exist but rules vary from state to state. New legislation imposes minimum benefits including the coverage of at least 65 percent of health care costs, standard premiums, and maximum out-of-pocket spending including premiums (not more than $5,950 per year for individual and $11,900 per year for families).

Children's Health Care in Alaska

Alaska is one of the few states that chose to extend Medicaid under CHIP regulation. Denali KidCare (DKC), Alaska's expanded Medicaid program, must be maintained until 2019 with at least the current scope of covered health services and eligibility. Under the current DKC program, all Alaska uninsured children from families with an income under 175 percent of FPL qualify for the Medicaid program. It means that all of these children get health care services under DKC program free of charge (except $50 per day for the first four days inpatient hospital treatment). The program meets five among eight "special performance bonuses" under the Children's Health Insurance Reauthorization Act of 2009 (CHIPRA) -- 12-month continuous eligibility, liberalization of asset requirement, elimination of face-to-face interviewing, using a single application, and automatic administrative renewal. This allowed DKC to get additional $788,505 in 2009 to provide coverage for more kids. Moreover, the program provides the opportunity to use it as a secondary health insurance for children from families with income under 150 percent of FPL. Thus, we are not expected to enroll more children in DKC because the program already has a higher eligibility (175 percent of FPL) than the federal floor requirements (150 percent of FPL).

Alaska Medicaid eligibility for adults is more liberal than the national median. The Medicaid income threshold for working parents is 81 percent of FPL, and 77 percent for the jobless compared with national median 64 and 38 percent respectively. Consequently, there is still plenty of room for expanding Medicaid coverage for the adult population up to 133 percent of FPL.

In addition, Alaska also already has a temporary high-risk pool. The Alaska Comprehensive Health Insurance Association (ACHIA), which was formed in 1993, has seven plans that generally cover 80 percent of health care cost (excluding mental care services, where it covers only 50 percent). Nevertheless, ACHIA will need to be restructured to comply with new rules, because the ACHIA's out-of pocket spending allowances meet federal requirements only in three plans (Plan A, B, and C) and all seven plans contain a $2,000,000 lifetime maximum that will also be prohibited in September 2010. These changes will help children with special care needs and disabled children to get health care and medical services as much as is needed without financial limitation.

Two insurance companies in Alaska - United HealthCare Insurance Company and CELTIC - already started covering dependents up to age 26; Premera Blue Crass Blues Shield of Alaska covers dependents up to age 22 and Aetna Life Insurance Company and ODS Alaska - up to 23.  However, the AlaskaCare Employee Health Plan will begin to provide this program only on July1, 2011, because the provision needs "to be acquired during the 2011 legislative session."^[xiv] Unfortunately, State of Alaska retiree insurance plan, being self-funding health insurance, decided not to participate in this innovation voluntarily.

At the same time, Alaska has the second lowest public health insurance eligibility for youth after North Dakota. More specifically, there are only three states (North Dakota, Alaska, and Idaho) that limit Medicaid and CHIP coverage for children from family's whose income is under 200 percent of FPL. The majority of states set the eligibility between 200 percent and 250 percent of FPL. Seventeen states even expand eligibility to between 250 percent and 400 percent of FPL. ^[xv]

Alaska is not considered a poor state and health care here is one of the most expensive in the United States. Thus, it is reasonable to increase DKC eligibility to at least 200 percent of FPL and provide access to health care for 1,200 Alaska kids whose parents have no regular source of health care at all. Depending on the timing and scope of the DKC expansion, the federal match could be much higher than the approximately 50 percent that it is currently. For more details, see the Medicaid financing regulation ^[xvi] and CHIPRA financing scheme ^[xvii].

School-based Programs

It is generally understood that immunizations, regular screenings, and preventive educational programs are powerful tools for improving children's health and saving future costs. Moreover, under the new legislation all of these services will be available at no cost for Medicaid and CHIP beneficiaries and also for privately insured patients. At the same time, children's programs at the schools allow the possibility of obtaining health care in a very effective way -- through school-based health centers.

There are several crucial elements that indicate adequacy of a health care system for children: access to health care, appropriateness of services, comprehensiveness, coordination, continuity, relation to community, and family centeredness. ^[xviii] School-based services effectively meet access, appropriateness, comprehensiveness, continuity, and coordination between health and educational professionals. Many scholars agree that school-based programs are the basis for any successful prevention activities: from special health education programs such as life style skills programs and childhood obesity programs, to oral health programs for children.

Under the new legislation, $11 billion will be available for increasing access to health care for community and school-based health centers in 2011. In Alaska, school-based health centers are still rather rare. However, the state has two examples of this: one is in Juneau and the other is in Anchorage. Both centers are financed through the state education funds and federal grants. This experience needs to be shared throughout the state.

Prevention and Early Intervention

The early childhood home visiting program is also promoted under the new health care policy. It meets all the factors that school-based services do as well as containing the family-centered elements. The main idea of the Maternal, Infant, and Early Childhood Home Visiting program is "promoting healthy development and improving maternal and child outcomes ... to help families create a nurturing environment for young children and connect to a range of services ... they might need"^[xix]. The federal government has approved $90 million to states already this year to initiate the programs under a pre-determined formula. Because specialized health care is concentrated mostly in Anchorage, this home visiting program will be very effective and efficient in increasing access to needed health care, improving quality by providing services as early as possible, and decreasing cost by avoiding consequences of lack of access and later intervention. The deadline for the first round of grant applications was July 9, 2010. Alaska applied for the grant. There are several existing health services (for example, Alaska Children's Services, Children Care Connection, and Alaska Children Trust) that can be potentially expanded by this program.

Early intervention and prevention among youth, and especially among at-risk youth, are some of the priorities included in federal grant support initiatives under the new regulation. Grants for "personal responsibility education programs," abstinence education, and outreach and educational activities are already available this year. For Alaska -- with one of the highest rates of sexual transmitted diseases, rape and considerable problems with tobacco, alcohol, and drug abuse -- these programs are critical. The state has a strong potential to provide them, since these programs not only already exist but also effectively collaborate with each other under the Anchorage Youth Development Coalition.

Trauma Centers

The new federal legislation establishes a new trauma center program. This program would strengthen emergency department and trauma center capacity. Unintended injury is a leading cause of death among children, and these trauma centers will decrease the mortality rate by providing quality and special emergency care. Alaska's unique environment offers access to potentially harmful outdoor activities in a setting of huge distances between the majority of towns and villages and Anchorage. This increases both the risk of unintended injury and the time when specialized health care is available. From these perspectives, a trauma center program would be part of a comprehensive approach to trauma care needs.

Conclusion

Ultimately, the Patient Protection and Affordable Care Act (P.L. 111-148) will serve the medical needs of children significantly better than current regulations. First of all, no child will be excluded from access to health care due to pre-existing conditions. Secondly, Medicaid and CHIP children will benefit from the programs' changes and innovations, and some children will get medical insurance through the exchanges with the public insurance option. This broad access to health insurance will provide more possibilities for kids to have their health care needs met. Thirdly, the new financial rules (caps on premiums and out-of-pocket spending, federal subsidy) will decrease economic and racial/ethnic disparities for children in the health care system. Fourthly, health care services for the youth population are going to be better adjusted for this population's health care needs -- prevention, regular screening, and psychosocial approaches. Fifthly, school-based centers are anticipated to improve effectiveness of prevention among children and adolescents. And finally, new trauma programs will better deal with one of the main causes of death among the youth population. The new legislation won't solve every problem, but it will surely improve the health of America's youth population rather significantly.

Alaska has the potential to increase access to health care for children by expanding DKC eligibility at least to 200 percent of FPL, or ideally even higher. Required changes in the Alaska Comprehensive Health Insurance Association (decreased out-of-pocket cost and a $2,000,000 lifetime maximum) will eliminate some problems with quality and cost of needed health care services for children with special care needs and disabilities. Federal grants for school-based centers, health education, prevention, and outreach activities will be able to successfully strengthen already existing programs and push forward the whole system of youth development in the state. Maternal, infant, and early childhood home visiting programs, trauma centers, "personal responsibility education programs," abstinence education, and so on can equalize access, quality, and cost requirements in children's health care definitely better than current legislation. However, the majority of these programs, changes, and innovations need leadership from state authorities to play a crucial role in this process. Personally, I believe that Alaska, being a rather unique state, should be a leader in providing health care for all Alaskans and especially for Alaska kids.

In just one case, KIC [Ketchikan Indian Corporation] strongly objected to a new funding breakout adopted by the caucus in pre-negotiations, which left KIC short of about $143,000 in new funding. The same action also affected several other providers in the same way.

Lawrence D. Weiss, PhD, MS, Editor
Kelby Murphy, Senior Policy Analyst
Kalia Yeagle, Administrative Assistant
Jacqueline Yeagle, Newsletter design and editing

 
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