Health Insurance

The kids aren't all right: A health insurance double whammy

CNBC explains: Obamacare in 2015

And you thought that customers had a lot to worry about.

Up to 3.3 million extra children—mostly in lower- and moderate-income families—could be without health insurance because of pending decisions by both the Supreme Court and Congress, according to a new study released Tuesday.

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That is the worst case of several scenarios analyzed in the report by the Urban Institute, which looked at the combined effects of three separate judicial and political decisions that are currently possible.

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Even in less dramatic scenarios, anywhere from between 1.1 million to 2 million kids would become uninsured, depending on how issues related to Obamacare subsidies, Medicaid and the Children's Health Insurance Program are decided by the Supreme Court and Congress.

And in the least dramatic scenario, an estimated 600,000 kids would lose their health coverage, according to the Urban Institute research. Its report includes an interactive tool to see how the decisions would play out in each of these situations.

"The bottom line right now is that protections of near-poor kids are really at risk right now," said Lisa Dubay, one of the authors of the report. That risk, she added, is "pretty big for this population."

That's because all three of the programs at issue benefit people with moderate-to-low incomes, and Obamcare subsidies help people in those income groups buy private insurance plans. Medicaid provides health coverage to lower-income people and CHIP gives coverage to kids whose families earn too much to get Medicaid.

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The double-whammy threat to children's health coverage from Congress and the Supreme Court comes just as Obamacare was on track to make significant gains in insuring kids, the report noted.

The Affordable Care Act, as implemented, is expected to reduce the number of uninsured children "by roughly half," the researchers wrote. "However, these gains could be eroded or even reversed" with the decisions, the report said.

One of those decisions could come in June in the Supreme Court case known as King v. Burwell. In that case, plaintiffs are challenging the legality of federal subsidies given to customers of, the federal Obamacare insurance marketplace that now serves 37 states.

Without those subsidies, more than an estimated 8 million people, primarily adults, would lose their health insurance in 2016 because they would no longer be able to afford health insurance at its nonsubsidized price.

But Dubay said that a decision for the plaintiffs in the King case alone threatens to lead to 600,000 kids becoming uninsured.

And such a decision would be exacerbated if Congress does not reauthorize funding for CHIP, and again if Congress, as proposed, lifts the requirement that states maintain their current eligibility for Medicaid to children whose families earn 138 percent of the federal poverty level, according to the Urban Institute. Without reauthorization, CHIP funding ends in September.

Dubay said that "in theory, it's very likely that CHIP would be reauthorized" because there is support for the program among Republicans in Congress as well as Democrats.

But in actuality, the current Congress has had difficulty getting bipartisan consensus on several big issues.

"Everyone wants to do it, so it's going to get done? That doesn't always happen," Dubay said.

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Dubay said she thinks that that the worst-case scenario envisioned by the report, the one in which 3.3 million kids become uninsured, is "very unlikely." That's because, she said, it assumes that all the states that could do so would restrict Medicaid eligibility for kids to only the ones whose families are under 138 percent of the poverty line.

But, she said, it's "not out of the realm of possibility" that nearly 2 million kids become uninsured because of a decision in King by the high court, and due to Congress not reauthorizing CHIP.

"That is something I worry about happening," Dubay said. "That could be the outcome of a sort of political logjam and a finding for the plaintiffs."