Politically, the Affordable Care Act (ACA)—better known as “Obamacare”—is nearly as controversial as gun control. It has been fought before Congress, the U.S. Supreme Court, and individual state legislatures, but its largest provision in still scheduled to take effect in January 2014. 

Under the ACA, Americans younger than 65 with incomes less than 133 percent of the federal poverty level will be eligible for Medicaid, the government program that provides medical insurance to those in need.

A position paper published in the Journal of the American Medical Association Pediatrics says that the expansion of Medicaid under the law will make a huge, positive difference for uninsured children.

Medicaid and Children Below the Poverty Line

According to the latest figures from the U.S. Census Bureau, about 11.8 percent of Americans—or 9.5 million families—are living in poverty.

Under the ACA, Medicaid will be transformed into a universal program for all American families with incomes below 138 percent of the federal poverty line. For example, the federal poverty guideline for a family of five in the continental U.S. is $27,570 per year.

“This is not an insignificant change. About half of the more than 30 million currently uninsured who are expected to get coverage under the ACA will do so through the Medicaid expansion. Many of the people who will get coverage are parents,” wrote Dr. Aaron E. Carroll of the Indiana University School of Medicine and Austin B. Frakt, Ph.D., of the Boston University Schools of Medicine and Public Health.

What Does the Affordable Care Act Mean for Kids?

The Children’s Health Insurance Program (CHIP) provides health insurance for eight million children whose parents earn too much for Medicaid but cannot afford private insurance. The president expanded CHIP enrollment in 2009, and once Medicaid is broadened under the ACA, the two programs will cover roughly one-third of all American children.

Since CHIP was enacted in 1997, it has lowered the percentage of uninsured American children from 11 percent in 1996 to 9.4 percent in 2011, according to the JAMA Pediatrics paper. 

The authors note that this a dramatic and important change, but it isn’t nearly enough because children with uninsured parents are less likely to receive recommended health services—such as vaccinations and check-ups—even if the children are covered under CHIP, Medicaid, or similar programs.

But What About the Cost of Medicaid?

Price is the most commonly cited reason why 10 states have decided not to participate in the Medicaid expansion, which means they’ll lose all federal funding for Medicaid. These states include Texas, Florida, and Louisiana, which have some of the highest uninsured rates in the nation. 

Carroll and Frakt's paper references two studies, including a 2008 randomized, lottery-style trial of Medicaid in Oregon. After 10,000 people in the state were given access to Medicaid, they reported improved access to medical care, 25 percent higher self-reported health scores, and a reduced financial burden from getting proper care.

The study also showed that Medicaid makes financial sense: the results revealed a 40 percent decrease in patients skipping payment on other bills because of medical expenses. 

Carroll and Frakt also cite a paper that appeared in the Journal of Health Politics, Policy, and Law, which they co-authored. In it, they argued that the expansion of Medicaid to the states would require less than one percent of the local gross state product. 

“Although a debate might continue in the political sphere, the evidence is quite clear that expansion of the program has many benefits for states and their low-income residents,” the article concludes.

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