Medicaid's Many Long-Term Benefits for Kids

Medicaid's Many Long-Term Benefits for Kids

The Supreme Court's recent decision upholding federal subsidies to help low-income Americans buy health insurance means health reform is here to stay, and states have no reason to delay taking up the option under health reform to expand their Medicaid programs. At the same time, Medicaid continues to face attacks from critics who would cut it deeply or undermine it structurally.

With all this in mind, and with Medicaid turning 50 this month, now's a good time to take stock of the program. One aspect of Medicaid is especially worth considering: According to a significant body of recent research, it has long-term benefits for the millions of children it has served in the past and the 32 million kids it serves today.

For starters, Medicaid provides cost-efficient and effective coverage for all its beneficiaries, including children; the cost of covering a child under Medicaid is 27 percent less than private insurance. And participation among children is very high: More than 87 percent of eligible kids participate in Medicaid or the Children's Health Insurance Program (CHIP).

By ensuring that families and children can access primary and preventive care, in addition to emergency care like hospital visits, Medicaid helps people of all ages live healthier lives. For children, the benefits begin even before birth. Comprehensive health coverage for a pregnant woman improves her child's cognitive ability and educational outcomes, the research shows.

Largely because they have access to preventive and primary care, children who are eligible for Medicaid are generally healthier, miss fewer days of school due to illness or injury, and perform at a high level in the classroom.

And these benefits extend up the educational ladder. People eligible for Medicaid in childhood are less likely to drop out of high school and likelier to earn a bachelor's degree than those who weren't eligible.

Covering more low-income children on Medicaid between 1980 and 1990 had an impact equivalent to cutting today's high-school dropout rate by 9.7-14 percent and raising the college-completion rate by 5.5-7.2 percent, one recent study demonstrated.

Those results are dramatic. In fact, the scale of gains from Medicaid access is similar to those from educational reforms like reducing class sizes and adopting schoolwide performance standards.

The results also show that, in addition to transforming the lives of individual kids, covering children produces a workforce with higher skill levels, which is important for fueling stronger economic growth.

Medicaid's also a powerful tool for expanding opportunity for low-income kids. Medicaid coverage narrows the gap in college graduation rates between low-income and higher-income children, research shows.

The benefits of Medicaid in childhood also extend to a healthier and more prosperous adulthood.

Children eligible for Medicaid for more of their childhood were hospitalized 8 to 13 percent less and visited the emergency room 3 to 4 percent less at age 25, a recent study reported. Along with improving overall health and quality of life, this drop in hospitalizations and trips to the emergency room generated considerable savings for the government.

Finally, children eligible for Medicaid have higher earnings as adults, according to a May 2015 study. Like the drop in hospitalizations, the higher incomes from adults help pay for the program. Each of these adults contributed $186 more in taxes through age 28 for each additional year they benefited from Medicaid.

Research on Medicaid's long-term benefits is part of a growing body of work showing that safety-net programs promote opportunity for their beneficiaries. In recent months, our research has highlighted the long-term benefits of other safety-net programs.

As Medicaid approaches its 50th birthday, the program clearly has wide-ranging benefits for kids — just one part of an impressive legacy of providing access to health care for millions of Americans while cutting the number of uninsured Americans.

Judith Solomon is vice president for health policy at the Center on Budget and Policy Priorities.

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