Reports Highlight Special Needs Children as Congress Weighs Medicaid Changes

Reports explain that plans for Medicaid block grants or per capita caps overlook who really uses Medicaid. It's mostly children.

Two reports this week outlined the high levels of need—and vulnerability—of children with serious health conditions, whose support systems could be affected as Congress debates the future of Medicaid.

About 11.2 million children fall into a category of “special healthcare needs,” which means they have or are at risk for “chronic physical, developmental, behavioral, or emotional conditions,” and need services far beyond what is typical for their age. These are children with autism, Down syndrome, spina bifida, muscular dystrophy, or various mental health conditions.

An issue brief from Kaiser Family Foundation, and a commentary appearing in The Hill, together outline the scope of the policy debate. Steve Allen, MD, chief executive officer of Nationwide Children’s Hospital in Columbus, Ohio, wrote in The Hill that Americans may not realize just how many children rely on Medicaid, while the Kaiser report shows how children with certain chronic health issues and their families could not survive without the program.

Since the Reagan administration, Republicans have eyed controlling Medicaid spending with block grants, which would give states a lump sum to manage based on local needs. The size of the grant would grow slightly this year with inflation. But states already have differences in how generously they match federal dollars, and some of the states with greatest needs spend the least. Right now, states have certain requirements to get federal money—all must cover pregnant women under a certain income, for example.

A block grant could eliminate these requirements. Also, depending on the program’s design, grants might not fluctuate with the economy. House Speaker Paul Ryan, R-Wisconsin, and others support the idea of a “per capital cap,” which gives states a set amount for every person who meets Medicaid income or disability criteria.

Several Republican governors want cost-sharing in Medicaid or requirements for job hunting or volunteering, but others say this overlooks who actually uses the program. Allen points to the data: children make up 50% of the Medicaid program, and Medicaid and the Children’s Health Insurance Program (CHIP) cover half of all children. He echoes a finding by a Georgetown team in November 2016, who wrote that due to the Affordable Care Act and CHIP, 95% of children are now insured—an all-time high. As Allen wrote, cutting Medicaid means cutting services to kids.

He supports innovation and wrote, “None of these points means we should not have conversations about Medicaid’s future.” Efforts at his hospital to work with Medicaid managed care have trimmed asthma-related emergency department visits 18.6%; hospital admissions for this group are down 18%. Without access to primary care doctors for these children, these results would be impossible.

It’s not clear how making Medicaid a block grant program would affect such access, nor is it clear what would happen to children with more serious health problems than asthma.

As the Kaiser report outlines, children with the greatest needs are over represented at the bottom of the socioeconomic ladder. While some may qualify for Medicaid on income alone, others are included because they have disability status. Virtually all states have allowed a disability-related pathway that examines a child’s assets, but not that of the parents, which allows them to stay at home for care and out of institutions. Middle-income families whose children have extreme needs can “buy in” to the program under the Family Opportunity Act.

Without Medicaid, these children would lose access to medical visits, vision and hearing screenings, dental appointments, and other services to “correct or ameliorate” their conditions. Children who need these long-term services and supports consume $33,700 a year in services, compared with $2700 for other children.

Thus, the report warned, “Policies that lead states to limit per enrollee spending or cut costly services could disproportionately affect these children by limiting their access to costly but necessary services,” which would be off limits through private insurance.

So far, Medicaid block grants remain more concept than reality. During his confirmation hearing, US Representative Tom Price, R-Georgia, who is President Donald Trump’s nominee for HHS secretary, could not guarantee that anyone who met certain income or disability criteria would get benefits.

“When you move to a block grant, do you still have the right?” asked US Senator Robert Menendez, D-New Jersey, during the confirmation hearing.

“No,” Price said. “I think it would be determined by how that was set up.”