How Child Health Financing and Payment Mitigate and Perpetuate Structural Racism

Health financing for children and youth comes mainly from commercial sources (especially, a parent’s employer-sponsored insurance) and public sources (especially, Medicaid and Children’s Health Insurance Plan [CHIP]). These 2 sources serve populations that differ in race and ethnicity. This inherent segregation perpetuates a system of disparities in health and health care. Medicaid (and CHIP) have become the largest single provider of health insurance to US children and youth, currently insuring over 50% of all children and youth, with even higher rates for children of racial and ethnic minorities. Medicaid provides substantial benefit to the populations it insures, with good evidence of both short- and long-term improved health and developmental outcomes, and better health and well-being as adults. Nonetheless, some characteristics of Medicaid, especially the major state-by-state variation in eligibility, enrollment practices, and covered services, along with persistent low payment rates, have helped to maintain a separate and unequal health program for racial and ethnic minority children and youth. Several changes in Medicaid—including linking CHIP more closely with Medicaid, strengthening national standards of payment and care, assuring coverage of all children, and incorporating social and family risk adjustment—could make the program even more beneficial and diminish racial differences in child health financing.