CLASP -- Expanding Health Care Coverage For Kids

OVERVIEW OF THE WORK OF THE MEDICAL CHILD SUPPORT WORKING GROUP AND IT'S RECOMMENDATIONS TO CONGRESS

by

Paula Roberts

April 13, 2000

BACKGROUND: There are roughly five (5) million children living in single parent families who do not have health care coverage. Most are eligible for either private health insurance (through coverage available to one of their parents) or publicly funded coverage such as Medicaid or State CHIP. Since most of these children live in families that participate in their state’s child support enforcement (IVD) program, it would be logical for the child support agency to assume a more proactive role in helping them obtain such coverage.

Indeed, every child support order obtained by the IVD system is supposed to describe how the child’s health care needs will be met. 42 USC Section 666(a)(19). However, few IVD orders actually address the health care issue. Even when an order covers this issue and requires one of the parents to provide private health care coverage for a child, the provision is very hard for the IVD agency to enforce.

CONGRESSIONAL DIRECTIVE: Congress recognized this and, in 1998, required the Departments of Labor (DoL) and Health and Human Services (HHS) to develop a standard National Medical Support Notice to streamline the process for enrolling children in private health care coverage. The proposed form was published for public comment in December 1999 and should be published in final form by September 1, 2000.

Congress also created a 30-member Medical Child Support Working Group composed of representatives of employers, insurers, health care plan administrators, payroll professionals, unions, parents and children’s advocates, the DoL and HHS, as well as state and federal officials from Medicaid and child support agencies. The Working Group was asked to 1) identify barriers in the current system that make it hard for children to obtain health care coverage; and 2) make recommendations to eliminate these barriers. After nearly a year of deliberations, the Working Group is now finalizing its report.

SUMMARY OF THE RECOMMENDATIONS: The basic premise of the Working group’s recommendations is that children should be enrolled in private coverage when adequate, accessible and affordable coverage is available to either parent. The enrollment process should be streamlined so that the employers, insurers, payroll organizations, and health plan administrators involved in the process know what the rules are and can easily follow them. When appropriate private coverage does not exist, children should be quickly enrolled in public coverage. There should be increased coordination between the child support program, Medicaid and State CHIP so that, to the maximum extent possible, children can move from private to public coverage, and within public coverage, with the least possible disruption.

RECOMMENDATIONS REQUIRING CONGRESSIONAL ACTION: Among the specific recommendations of the Medical Child Support Working Group requiring Congressional action are the enactment of:

a requirement that coverage available to both parents be considered in determining whether private health care coverage is available. Under current practice, states are looking only at coverage available to the noncustodial parent, thus missing another possible source of coverage (the custodial parent).

a set of standards for deciding when private health care coverage available to a child through one of his/her parents should actually be ordered. These standards assess whether the available services are adequate (cover at least a minimal package of services), accessible (are within geographic reach of the child), and affordable. Currently, these standards do not exist so children are sometimes enrolled in inadequate or inaccessible coverage.

a new standard for assessing whether private coverage is affordable. Current federal regulations deem all private health care coverage to be "affordable" regardless of actual cost. For many low or moderate income families, if these regulations are followed, either cash support is adjusted downward (leaving the child with too little to provide food, clothing and shelter) or the noncustodial parent is required to pay so much in support that he/she cannot meet his/her basic needs. Neither alternative is acceptable. The Working Group recommends that the old standard be replaced with a provision that coverage should be deemed affordable only if the associated premium does not exceed 5% of the responsible parent’s income.

changes to Section 1908 of the Social Security Act to clarify the scope and intent of those provisions. There is some confusion about whether these laws (e.g., the requirement that children be enrolled in their noncustodial parent’s plan even if not living with the covered parent or were born out of wedlock) apply to all cases or just Medicaid cases. Employers are also concerned that, as currently worded, the statute requires continuation coverage to children with medical support orders when those children would not be covered if they lived with both parents and this needs to be addressed.

changes to ERISA so that children enrolled in private coverage pursuant to a Qualified Medical Child Support Order (QMCSO) would have special enrollment rights, including the ability to enter the plan out-of-season. Currently, this is not clear.

enactment of federal legislation that would allow the enrollment federal employees and their dependents in available health care coverage, without the employee’s consent, if the employee has been ordered to provide coverage and has failed to do so. Private employers must enroll children whose parent has been ordered to provide coverage and has failed to do so. It is only fair that federal employees be subject to the same rule.

outreach by the child support program so that, if private coverage is not available, parents have information about Medicaid, State CHIP or any other program which provides free or low cost health care coverage for which the children might be available. Many children in the IVD system do not have access to private coverage and their parents do not know about the range of publicly subsidized options that may be available to them. The IVD agency could help fill this gap.

amendment of federal law to allow child support agencies to determine presumptive eligibility for Medicaid so that eligible children can be quickly enrolled when this is the appropriate coverage.

allowing states to impose cost sharing on noncustodial parents whose children are enrolled in Medicaid or State CHIP when those parents have the financial ability to help defray these costs. Currently, there is a limited ability for states to ask custodial parents to contribute to the cost of Medicaid and a greater somewhat greater ability to ask custodial parents to contribute to the cost of State CHIP. However, there is no provision for asking noncustodial parents to contribute toward these costs. Both equity and principles of fiscal responsibility suggest that noncustodial parents who are able to contribute to these costs be asked to do so. The rules limiting custodial parent contributions to Medicaid and State CHIP should be used to set limits on expected noncustodial parent contributions.

enhanced federal funding for a five-year period to encourage state child support programs to put more staff and resources into obtaining health care coverage for children. Thereafter, states should receive incentive payments for expanding the number of children who obtain coverage, whether it is private or publicly funded.

repeal of the authority for child support programs to pursue low-income non-custodial parents for reimbursement of birthing costs paid by Medicaid. Many advocates have identified this as a major barrier to low-income fathers who want to come forward but cannot afford to payback these costs.