Most spending on children's health care in Medicaid and CHIP goes for children with chronic health problems

Research Activities, October 2010, No. 362

Spending on children's health care in Medicaid and the Children's Health Insurance Program (CHIP) is highly concentrated, particularly among children with chronic health problems, reveals a new study. Among children enrolled for the full year, the top 10 percent of enrollees account for 72 percent of total Medicaid/CHIP spending on children. Two-thirds of children in this highest-spending decile have chronic conditions. The top three deciles, together, account for 90 percent of all Medicaid/CHIP spending on children. At the same time, 30 percent of enrolled children receive little or no care—in some cases despite having special health care needs or chronic conditions.

With so little contact with providers, these children are at increased risk of having health problems that go undiagnosed and untreated, notes Thomas M. Selden, Ph.D., of the Agency for Healthcare Research and Quality. He and colleagues from the Urban Institute examined care spending for Medicaid/CHIP-enrolled children (aged 1-17), basing their findings on pooled data from the Household Component of the Medical Expenditure Panel Survey, 2002-2005. They find spending among publicly insured children to be more heavily concentrated than either the overall spending distribution for children or the Medicaid/CHIP spending distribution for adults.

The results highlight the importance of strategies that target Medicaid/CHIP spending among children in the upper spending deciles. Of special policy interest are children with chronic conditions, who make up 68 percent of the children in the top spending decile and 84 percent of children who are in the top decile for 2 consecutive years. Because much of the spending for children with chronic health needs goes for hospital stays and emergency room visits, cost savings could come from greater focus on case management and preventive ambulatory care.

The research may also offer insights into why charging even nominal public premiums can be associated with lower take-up of public programs and higher disenrollment rates, particularly for children with fewer health problems. Given that many children enrolled in Medicaid/CHIP receive few or no services in a given year, families whose children have no chronic health problems or special needs might view public coverage as overly expensive, even at fairly low premium levels.

More details are in "Containing costs and improving care for children in Medicaid and CHIP," by Genevieve M. Kenney, Ph.D., Joel Ruhter, B.A., and Dr. Selden in Health Affairs 28(6), pp. w1025-1036, 2009. Reprints (AHRQ Publication No. 10-R011) are available from the AHRQ Publications Clearinghouse.

Page last reviewed October 2010
Internet Citation: Most spending on children's health care in Medicaid and CHIP goes for children with chronic health problems: Research Activities, October 2010, No. 362. October 2010. Agency for Healthcare Research and Quality, Rockville, MD.