Families Who Have Children With Special Needs More Often Rely on Medicaid than Employer-Based Coverage

A health care system "based on parental employment is problematic for families in which parents cannot work full-time because of a child's impairments," a study in the December issue of the American Journal of Public Health notes. Researchers Katherine Heck and Diane Makuc of the Centers for Disease Control and Prevention's National Center for Health Statistics examined the 1994 National Health Interview Survey, identifying children with "special needs," defined as "conditions likely to require a high amount of parental care." Researchers hypothesized that "having a child with special needs would reduce the employment of parents and that children with special needs would therefore rely heavily on public rather than employer-sponsored insurance." They study used a sample of 19,003 children ages 5-17 -- 1,427 with special needs -- 11,988 of whom had employer-sponsored insurance, 3,111 of whom had Medicaid coverage, 2,864 of whom were uninsured and 1,040 had another type of insurance. Compared to children who did not have special needs, children with special needs had lower family incomes and their parents had lower education levels. Parents of special needs children were less likely to work full-time compared to other parents. Researchers noted that parents of children with special needs "may have an incentive not to work, or to work fewer hours, so that their children may qualify for Medicaid coverage, Supplemental Security Income, ... or both." Regarding insurance, children with special needs were 2.65 times more likely to have Medicaid coverage, but had a lower rate of employer-sponsored coverage than did children without special needs. However, children with special needs who came from low-income families were less likely than other low-income children to be uninsured, although the researchers noted this "difference was not significant." The same held true for children both with and without special needs in higher income families.

Parental Employment Directly Affects Coverage Type
From these findings, the researchers surmised that "lower parental employment among children with special needs appears to contribute to the children's lower coverage by employer-sponsored insurance." Furthermore, the disparity in employer-sponsored insurance "was partly due to less full-time employment among parents of children with special needs." The researchers note that in the past, families had obtained Medicaid through the Aid to Families with Dependent Children (AFDC) program, but that parents now might have "difficulty" caring for their children under the work requirements of the Temporary Assistance to Needy Families (TANF), the program adopted during 1996 welfare reform legislation (H.R. 3734) to replace AFDC. The researchers concluded, "With lower parental full-time employment and less employer-sponsored coverage among children with special needs, Medicaid provides an important safety net, although many children with special needs remain uninsured. Insurance and health services use among children with special needs should be monitored as policy changes take effect that may alter Medicaid coverage" (Heck/Makuc, "Parental Employment and Health Insurance Coverage Among School-Aged Children with Special Health Care Needs," American Journal of Public Health, December 2000 issue). Further information regarding the government's effort to improve Medicaid enrollment procedures following welfare reform is available from HCFA, including specific information regarding SSI eligibility. Also, the GAO has information regarding the treatment of special needs children who are enrolled in Medicaid.