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The Deficit Reduction Act of 2005
Short Take No. 1: Opportunities and Challenges for ECCS Initiatives

Author: Kay Johnson
Publication Date: June 2006

This is an excerpt from the full brief.

The Issue

This Project THRIVE Short Take examines the potential impact of the Deficit Reduction Act of 2005 (DRA) on health access and coverage for young children ages birth to 5 years. The core provisions of the DRA are described in contrast to existing law, and opportunities and threats are discussed. The last section offers recommendations and resources for further study.

Each state’s Early Childhood Comprehensive System (ECCS) initiative has a component focused on assuring health access and a medical home for every child. The DRA changes to Medicaid have important implications for assuring health coverage and access and will potentially have their greatest impact on young children who are more likely to be covered through Medicaid than older children. These new options and requirements in Medicaid should be considered both in states developing ECCS plans and those implementing early childhood system changes.

What Research Says About Medicaid and Young Children

  • Young children are more likely than older children to have Medicaid as their source of health coverage. An estimated 35-40 percent of U.S. births are financed by Medicaid, with continuing coverage throughout the first year of life for most infants. In addition, approximately one-third of children ages 1-5 years are covered by Medicaid.
  • Medicaid is important to both low-income white and minority children. In 2004, an estimated 80 percent of poor black children under age 6 were covered by Medicaid.
  • Children make up half of all Medicaid enrollees, but represent less than 20 percent of the total spending—primarily because they use less expensive primary and preventive services.
  • Millions of uninsured children are eligible for but not enrolled in publicly financed health coverage through Medicaid and SCHIP (the State Children’s Health Insurance Program). Effective outreach and enrollment policies can make a difference in coverage levels, and states have adopted promising practices.