Policy Priorities

Policy Priorities image of kids

Covering All Children Makes Economic Sense

Providing all children quality health coverage is not only the right thing to do, it’s the smart and cost effective thing to do.  The costs of not insuring all children are simply too high to ignore.

Public Investments
Prenatal and Maternal Care
Primary and Dental Care Visits
Immunizations

Public Investments

Lack of health insurance misuses valuable community resources and significantly reduces the returns on major social investments.

  • An uninsured child costs the local community $2,100 more than a child with Medicaid or CHIP.
  • Education is an investment that yields high returns for the public. In the United States, the internal rate of return to the public of an individual obtaining a high school diploma (or its equivalent) is between 9.7 and 12.5 percent in additional taxes received; for an individual obtaining a college-level degree, the rate is between 13.0 and 14.1 percent in additional taxes received.
  • Developmental delays and absenteeism prevent many children from reaching their full potential, and rob America from having the healthiest and most productive workforce possible.  Children miss more than 51 million hours of school each year because of dental-related illnesses. Asthma-related illnesses cause children to miss almost 13 million school days a year.
  • Children who miss more than 18 school days in kindergarten show lower levels of achievement in math, reading and general knowledge during first grade; and education yields high returns as a public investment. The median income for individuals 25-years-old and over with less than a high school diploma is $14,146; for those who completed a high school diploma the median is $22,184 – or about half of the median for those with bachelor degrees, which is $41,161.
  • Chronic absenteeism exacts a high price from children, who have difficulty making up the work they missed and keeping up with their peers, and also from their parents, who must take time off from work during these absences. Parental loss of work contributes to nearly $1 billion in indirect costs to the nation in lost productivity.  Additionally, one analysis of national data that concluded a sibling who reported excellent or very good health in childhood earned 24% more than a sibling who was not in good health.
  • Children enrolled in the Children’s Health Insurance Program missed fewer classes and showed better school performance than when they were uninsured.

Prenatal and Maternal Care

Investments in prenatal and maternal care are particularly cost effective.

  • For every $1 spent on prenatal care, $3.33 can be saved in costs associated with postnatal care and another $4.63 in long-term costs.
  • The most common medical complication in a pregnancy is gestational diabetes, with approximately 180,000 reported cases in 2006. However, every $1 spent on preconception care programs for women with diabetes yields a $5.19 reduction in health costs for the mother and baby.
  • Smoking cessation programs for pregnant women are also an especially sound investment, for every $1 spent on smoking cessation among pregnant women $3 are saved in later health-related costs.
  • In 2006, about 350,000 babies were born at low birthweight and the cost of hospitalization for a preterm or low birthweight baby is 25 times the cost of hospitalization when a healthy baby is born, on average; preterm birth in 2005 cost the United States at least $26.2 billion or $51,600 for every preterm infant born.
  • Children born at low birthweight are twice as likely to have clinically significant behavior problems, such as hyperactivity, and are 50 percent more likely to score below average on measures of reading and mathematics at age 17.

Primary and Dental Care Visits

Primary care doctor visits cost less than emergency rooms and good oral health care is an essential preventive service.

  • The cost for a child to visit a doctor in the early stages of an asthma attack is about $100, but going to the emergency room to treat full-blown asthma symptoms could lead to a three-day hospital stay costing more than $7,300.  Similarly, a study in Texas found that the average cost for a diabetes patient to visit a clinic is $113, but a trip to the emergency room for diabetes costs $5,662.
  • Children’s average dental related costs almost double when a child’s first preventative visit occurs at age 4 or 5 (about $546), compared to when that visit occurs before the child is age 1 (about $262). Further, approximately $8 million a year is spent on hospital care for the treatment of dental abscesses.

Immunizations

Immunizations are another extremely cost effective preventative measure.

  • Every $1 spent on vaccinations for children saves $16 in medical and other costs.
  • The seven routine childhood vaccines prevent 33,000 deaths and almost 14 million incidents of disease over the lifetime of children born in any given year; this is an annual $9.9 billion in savings in direct medical costs and a further $43.3 billion in savings in indirect costs.
  • The most common reason a pre-school aged child visits a physician’s office is for acute otitis media (a middle ear infection). A 2008 study conducted by researchers at the Centers for Disease Control and Prevention found that vaccinating against the pneumococcal disease results in an estimated $460 million annually in direct savings of acute otitis media-related medical costs.

Poor health in childhood can cast long shadows later in life; consequently, good health at birth and throughout childhood is essential both for children themselves and the adults and workers they will become. Further, the cost effectiveness of providing health care to all children makes universal coverage a sound financial investment. All children must have access to affordable, quality health care.