Background: Many poor children rotate through the Medicaid program with periods of being uninsured.
Objective: To determine health and cost consequences of a Medicaid policy change that extended the Medicaid eligibility redetermination period for children in California from 3 to 12 months.
Research Design: A pre/postevaluation with a comparison group of a natural experiment.
Subjects: All California children ages 1-17 years who received a minimum of 1 month of Medicaid coverage in 1999-2000 (3,288,171) and/or 2001-2002 (3,230,120).
Measures: The percentage of children with continuous Medicaid coverage and the hospitalization rate and costs for ambulatory care sensitive conditions in each time period.
Results: In the 2 years before the policy change, 49% of children had continuous Medicaid coverage compared with 62% in the 2 years afterward (P < 0.0001). After adjusting for demographic and programmatic differences in the population of children in each time period, the relative hazard of a hospitalization for an ambulatory care sensitive condition for a child with at least 1 month of Medicaid coverage decreased to 0.74 (P < 0.0001) after the extension of the Medicaid enrollment period. There was $17 million less in estimated hospitalization costs for ambulatory care sensitive conditions with less frequent eligibility redetermination that partially offset the estimated $150 million in additional costs to Medicaid for providing more continuous coverage.
Conclusions: Reducing the frequency of eligibility redetermination for children in Medicaid was associated with higher costs to the program but more continuity of insurance coverage, improvements in health, and lower hospital spending.