AHCA Slashes Billions Out of Children’s Health

Today, the Children’s Hospital Association released new research by Avalere Health that finds the American Health Care Act (AHCA) would reduce funding for non-disabled children by $43 billion under a per capita cap model and $78 billion under a block grant.

As the report says:

Children in Medicaid could be disproportionately affected by cuts to funding and benefits leading to instability in coverage and access, which can cause higher rates of unmet healthcare needs and worse health outcomes compared to children that have continuous coverage. As policy makers debate Medicaid reform proposals, the potential impacts on children’s health and development will need to be considered.

Avalere’s report points out that, under the per capita cap, the House bill sets the allowable inflation rate for children (3.7 percent) at a level well below the expected rate of growth (4.8 percent). That shortfall accumulates over time. According to Avalere, federal funding would be reduced by 10 percent on average to children by 2026.

Furthermore, Avalere estimates that the Medicaid per capita cap would cut funding to states by a range of $59 million in North Dakota to $5.1 billion in Texas from 2020–2026, and that the health coverage of millions of children could be put at risk under the per capita cap.

Even worse, the House bill includes a Medicaid block grant option for states that would set the cap at an even lower inflation growth rate (more than 50 percent below the estimated need) and would not make any adjustment for population growth. The block grant option would create a financial incentive for states to cut care, services, and coverage to our nation’s most vulnerable children, particularly at a time when need is the greatest, such as during an economic recession, health epidemic, or a natural disaster.

In 1996, Senator John Chafee (R-RI) spoke on the Senate floor in opposition to Medicaid block grants. As he predicted:

As states are forced to ration finite resources under a block grant, governors and legislators would be forced to choose among three very compelling groups of beneficiaries.
Who are they? Children, the elderly, and the disabled. They are the groups that primarily they would have to choose amongst. Unfortunately, I suspect that children would be the ones that would lose out.

Chafee was right to say children would be “the ones that would lose out.” However, in AHCA or Trumpcare, the House of Representatives would make that decision for states, as the bill explicitly exempts senior citizens and people with disabilities from the block grant while leaving children in harm’s way.

Consequently, Avalere estimates the bill’s Medicaid block grant option would result in the federal government shortchanging funding to states for children’s health coverage by $78 billion or “19 percent on average.”

The cuts to children’s health coverage would be even greater than Avalere reports because the AHCA would also allow states to reduce their contribution or match under the block grant by another 30 percent. The compounding effort of both federal and state cuts would be devastating to the health of children.

It is important to note that Avalere study understates the impact to children in another critical way, as the estimates do not even include the impact that the per capita cap would have on children with disabilities. According to Avelere, their study did not include the impact on children with special health care needs “due to the lack of comprehensive and up-to-date data on federal spending for disabled children at the state level.”

The report adds, “On average, 1.6 million children between 0–18 years of age are enrolled in Medicaid each month due to disability and would also be impacted by federal funding reductions under the AHCA’s per capita cap model.”

Consequently, the study makes clear that the most vulnerable children in our society will be the ones most likely put at risk by the House. If a newborn has a birth defect or a child is diagnosed with cancer, a Medicaid per capita cap or block grant from the federal government puts the state in the position of bearing 100 percent of all the costs of that chronic disease or illness above the arbitrarily imposed federal cap. States would have a fiscal incentive to restrict coverage and benefits, shift costs to providers or local governments, and impose other forms of limits or rationing of care on vulnerable populations, particularly those with high-cost and life-threatening illnesses.

This is particularly disturbing because proponents of the AHCA argue that the bill is about their promise to “repeal and replace Obamacare.” However, the bill goes well beyond that by doing enormous harm to the health coverage of 37 million children that rely upon Medicaid for their health and well-being — coverage that predates and has nothing to do with the Affordable Care Act (ACA) or Obamacare.

Therefore, before taking action, the Senate should scrap the House bill or Trumpcare, go back to the drawing board, and if nothing else, commit to “do no harm” to our nation’s children.

As Senator Bob Graham (D-FL), my former boss, said in opposition to Medicaid block grants back in 1995:

I urge my colleagues to think twice before closing this chapter of America’s history. Medicaid has not been a failure. It has been a success. This success tory needs to told and retold from the healthy infant born to the frail elderly living in dignity; from the disabled adult to the handicapped child; from the abused child to the immunized child. These are the faces of the success story that is called Medicaid. These are the faces that are watching the Senate at this defining moment of American history.