Tracking Your Success
Retention: Why Eligible Children Lose Coverage

Updated: 6.1.06       Printable version

Procedural reasons:
These include complex renewal forms, too much documentation required, frequent renewal (i.e., quarterly, or more often, as opposed to annually), face-to-face interviews, administrative errors (i.e., the program lost the renewal form or the family never received the packet) and language barriers (i.e., Spanish-speaking Latino families receiving the renewal packet in English and not Spanish).

Financial reasons:
Experts are torn about the role of cost-sharing in retention. Some argue that families find the premium payment amount to be reasonable and prefer paying for their coverage (as opposed to receiving a "hand out"). Other data show that families sometimes find it difficult to pay their premiums and so occasionally miss payments, which leads to their child's loss of coverage. In addition, some experts believe that non payment of premiums alone cannot explain the majority of disenrollments. They believe this is a catch-all category that states use and does not accurately reflect the real cause of loss of coverage. For example, the family moved out of state and therefore stopped paying premiums. Finally, some experts say the problem is not the premium amount but rather the inflexibility of SCHIP rules when a family misses payments. They say that states often have a rigid payment schedule that does not always reflect the less predictable financial status of enrolled families.

Awareness, attitude and lifestyle issues:
A number of studies find that many families are unaware that they need to renew to keep their child enrolled in Medicaid or SCHIP. In addition, many families seem unclear about income eligibility levels and may be inaccurately "self-determining" that they no longer qualify for Medicaid or SCHIP. A number of experts also talk about the fluid economic and personal lives of enrolled families and how that can make staying enrolled difficult. For example, some studies find that a common reason families lose coverage is that they forget to mail or do not get around to mailing the renewal forms or premium payments. Finally, many studies indicate that stigma is not a major issue in terms of retention. These studies show that both enrolled and disenrolled families give high ratings to both programs and the majority of families want their disenrolled children back in the programs. However, a few studies do suggest stigma may be an issue for some families (i.e., they feel negatively towards Medicaid and SCHIP because of their links to welfare and public assistance).

Systems reasons:
The research suggests that problems have resulted from the delinking of Medicaid from cash assistance. A substantial number of families incorrectly lose Medicaid when they lose their cash assistance and/or food stamps. While intended to protect families from loss of coverage, delinking procedures, education and training are not always implemented effectively.

Health status and socioeconomics:
There is newer research on factors such as health status, race, gender and income with regard to retention. While most authors stress that further research is needed on these issues, they highlight possible trends about who is losing coverage. For example, some studies assert that children with more health needs and who use more health services are more likely to retain the ir health coverage, while healthier children who do not use many health services tend to lose coverage at higher rates. Despite the logic of these findings, there is at least one study that contradicts them. It found that disenrollees tend to have poorer health status than current enrollees. Another emerging trend is that researchers are finding some racial and ethnic groups more susceptible to loss of coverage. Three different studies we reviewed found that African-American children were more likely to lose coverage than non-Hispanic white children. One study also looked at the role of income and found that lower income families -- those earning less than 133 percent of the Federal Poverty Level -- are more likely to lose coverage than those with higher incomes (over 200 percent of poverty). Finally, one study found that boys were slightly more likely to retain coverage than girls.

For a full report on why children lose Medicaid and SCHIP coverage, download the Covering Kids & Families Communications Strategies for SCHIP and Medicaid Retention guide.