PEDIATRICS Vol. 112 No. 3 September 2003, pp. 668-669
Is Medicaid, the Largest Insurer of Children With Special Health Care Needs, in Danger?
Steve Berman, MD, FAAP
Department of Pediatrics
Children’s Hospital
University of Colorado School of Medicine
Denver, CO 80218
In this issue of Pediatrics, Weller et al,1 using the 1994 National Health Interview Disability Survey, describe how insurance and sociodemographic characteristics influence the use of medical and other health-related services by school-aged children and adolescents with special health care needs. The 4 medical services included physician, hospital, emergency department, and mental health. The 7 health-related services included therapeutic, social work, medical care coordination, nonmedical care coordination, assistive devices, transportation, and housing modifications.
Using logistic regression techniques, the investigators found that age, race/ethnicity, and parental education were significantly associated with multiple medical and health-related services. Racial/ethnic disparities were identified even after adjusting for poverty, health status, and insurance in the use of health related services. The findings also suggest that children of color are less likely to use community-based physicians and more likely to use hospital and emergency department services. The findings also provide evidence that Medicaid programs are successful in ensuring that children with special health care needs do receive needed services, as children with either public insurance alone or in combination with private insurance were more likely than privately insured children to have used mental health services as well as therapeutic, social work, nonmedical care coordination, transportation, and housing modifications. Medicaid now covers 37% of all births in the United States and provides health care coverage to one third of children with special health care needs.2 The findings of this study strongly support the need to create a Medicaid "wrap-around" program to supplement private insurance and/or a subsidized Medicaid "buy-in" program for families with children with special health needs who have inadequate private insurance.
However, rather than expanding Medicaid, Congress is considering President Bush’s proposal to "modernize Medicaid." In January 2003, Governor Bill Owens joined Governors Jeb Bush of Florida and John G. Rowland of Connecticut in asking President Bush to restructure Medicaid. The proposal to "modernize" Medicaid would provide additional Medicaid funding to participating states for the next 7 years.3 This additional funding would help alleviate the current deficits faced by many states because it would reduce the amount of state dollars that would have to be allocated to Medicaid. Unfortunately, there are 2 onerous federal conditions for receiving these additional federal funds. First, states must "pay back" the added funds after 7 years by accepting decreases in annual federal Medicaid funding in the eight, ninth, and tenth years. This payback is necessary because the proposal is "budget neutral" to the federal government over a 10-year period. Making a decision to accept the added federal dollars creates a big future debt. Accepting this proposal would be like paying a bill due today using a high-interest credit card. This would be fiscally irresponsible. Second, the proposal replaces the current financing of Medicaid with a block grant, which places an upper limit or cap on federal spending for Medicaid regardless of economic conditions or the number of people eligible for enrollment and in need of Medicaid services. Currently, state Medicaid spending is matched by the federal government with no cap on federal spending. Now, increases in state spending for Medicaid will be matched with federal dollars when an unexpected recession or a regional disaster increases the number of enrollees in Medicaid.
Many prominent Republican governors in the past have strongly opposed this approach to block grant and cap federal Medicaid spending. On April 14, 1997, 41 governors, including current US Department of Health and Human Services Secretary Tommy Thompson, and Bush administration Cabinet members Tom Ridge and Christine Todd Whitman, wrote President Clinton: "We adamantly oppose a cap on federal Medicaid spending in any form. Unilateral caps in federal Medicaid spending will result in cost shifts to states, enabling the federal government to balance its budget at the expense of the states." At that time Governors Bob Miller of Nevada and Mike Leavitt of Utah in testimony before the US Senate Finance Committee said: "Caps could result in states becoming solely responsible for unexpected program costs, such as a loss in a lawsuit on reimbursement rates or the development of expensive new therapies that drive up treatment costs beyond the federal allowable rate." These concerns are as true today as they were 6 years ago.
Furthermore, although advocates of this proposal say it will provide greater flexibility to extend Medicaid coverage to families, states would not be able to extend Medicaid coverage to any new groups without cutting current eligibility and benefits because federal support will be based on 2002 expenditures. Participation in this plan would mean that any future expansion of a state Medicaid program would have to be done without the benefits of the concurrent federal match.
Advocates for this Medicaid "modernization" proposal are using the current state budget crisis as an opportunity to "bribe" governors and state legislatures into accepting Medicaid block grants with federal caps on spending. The modernization and flexibility promised by this proposal really mean future cuts in benefits, services, and the number of families, disabled, and elderly that can be enrolled.
The more appropriate approach to easing the strain on state budgets caused by Medicaid expenditures would be to simply reduce the amount of money states must contribute to Medicaid during these difficult economic times by increasing the federal share by increasing the Federal Medical Assistance Percentage (FMAP) rate. The publication of this study should energize pediatricians and other child advocates to fight and defeat this and similar proposals that would block grant, cap federal Medicaid spending, and mortgage the future of the Medicaid program as well as that of many families of children with special health care needs.
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FOOTNOTES
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Received for publication May 1, 2003; Accepted May 1, 2003.
Address correspondence to Steve Berman, MD, Children’s Hospital, 1056 E 19th Ave, B032, Denver, CO 80218. E-mail: berman.stephen{at}tchden.org
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REFERENCES
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- Weller WE, Minkovitz CS, Anderson GF. Utilization of medical and health-related services among school-age children and adolescents with special health care needs (1994 National Health Interview Survey on Disability [NHIS-D] baseline data).
Pediatrics.2003; 112
:593
–603[Abstract/Free Full Text]
- American Academy of Pediatrics, Division of Health Policy Research.
Children’s Health Insurance and Medicaid Fact Sheet. Elk Grove Village, IL: American Academy of Pediatrics, Division of Health Policy Research; 2003
- News release from the United States Department of Health and Human Services. Bush Administration will propose innovative improvements in states’ health coverage for low-income families. Available at: http://www.hhs.gov/news/press/2003pres/20030131d.html
PEDIATRICS (ISSN 1098-4275). ©2003 by the American Academy of Pediatrics
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