PEDIATRICS Vol. 116 No. 6 December 2005, pp. 1545-1546 (doi:10.1542/peds.2005-1342)
COMMENTARY |
Tax Cuts, Budget Deficits, and Medicaid Cuts: Does "Starving the Beast" Mean That Children's Health Must Take Two Steps Backward?
Department of Pediatrics
University of Colorado School of Medicine
Denver, CO 80218
Children’s Hospital
Denver, CO 80218
The Colorado experience with Medicaid published in this issue of Pediatrics1 demonstrates how attempts to restrain the growth in Medicaid expenditures can restrict access to primary care and preventive services and ultimately increase per-capita Medicaid expenditures because of higher preventable hospitalization rates. This study deserves the attention of national and state policy makers because of the federal Conference Agreement on the Federal Budget Resolution that includes $10 billion in Medicaid and State Children's Health Insurance Program reductions. In many states these federal reductions are likely to derail needed increases in Medicaid payments for physician services to levels that at least cover overhead expenses. Do these budget reductions mean that we will be taking 2 steps back on the path to improving the lives of America's children as we address the consequences of our large and growing national deficit and the demographic impact of an aging population? These structural deficits and projections of future entitlement spending pit the needs of children and future generations against the elderly. This conflict threatens to tear apart our country's social fabric and sense of equity. Attempts to reduce the large federal budget deficit by containing nonmilitary and nonentitlement spending is disproportionately impacting children and their families. Too many of our nation's children face substantial challenges and are already vulnerable and at high risk for health and social problems. Almost 13 million US children live in poverty,2 >8 million have no health insurance throughout the year,3 many have difficulty getting needed care,4 1 million 2-year-old children are not fully immunized,5 and nearly 4 million (50.7%) 3- and 4-year-olds are not enrolled in nursery school, preschool, or prekindergarten education programs.6 In addition to the Medicaid and State Children's Health Insurance Program reductions, other budget cuts that will negatively impact the well-being of children include substantial cuts to food stamps, the School Lunch and Breakfast Program, Supplemental Nutrition Program for Women, Infants, and Children (WIC), Head Start, and the Child Care and Development Block Grant.
Contrast our national commitment to children with our commitment to the elderly: Poverty among the elderly is now 10.2% compared with 17.6% for children younger than 18 years. In 2000 the average elderly person received >7 times the amount of governmental program benefits as did the average child: $17688 vs $2491, respectively.2 This inequity in allocation of federal funds is likely to substantially increase in the coming years. Social Security outlays as a share of worker payroll are estimated to rise during the next 35 years from 11.1% to 17.8%, and both parts of Medicare are estimated to rise from 5.6% to 18.2%.2 The elderly received the Medicare Prescription Drug Bill, which is estimated to cost $600 billion between 2004 and 2013, whereas >20 million children went without health insurance at some point in 2002–2003.3 The number of uninsured children will increase if our nation's budget deficit continues, budget cuts proposed for Medicaid are adopted, and employer-funded insurance declines further.
In his book Running on Empty: How the Democratic and Republican Parties are Bankrupting Our Future and What Americans Can Do About It,2 Peter G. Peterson, a secretary of Commerce under President Nixon, warns Americans about the consequences of our huge federal budget deficits generated by inappropriate tax cuts: "When such deficits are incurred to fund a rising transfer of resources from young to old, they also constitute an injustice against future generations." Peterson states that cash-flow deficits for Social Security and Medicare (entitlements for the elderly) are estimated to increase to $783 billion in 2020.7 Many elderly are very concerned about this injustice; some are donating their Social Security checks to organizations such as the Hope for the Generations Fund to help address the unmet needs of children.
Is it not time to come together and address the nation's intergenerational equity issue? This issue should not be viewed as a competition between the young and the elderly but rather the need for equity and justice for both. We should remain committed to moving forward on the path that provides every child in America with health insurance that delivers quality medical care and ensures that we have a quality educational system across the full continuum from early childhood education to postgraduate university studies. This path requires reforms in Social Security and Medicare that might require people to work a little longer and get a little less in benefits and an approach to government that reduces our structural deficits by a combination of both decreased spending that does not disproportionately impact children and increase in taxes. Our elected officials should reject the "starve the beast" mentality and understand the relevance of a Haida Native American expression: "We don't inherit the earth from our ancestors; we borrow it from our children."
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FOOTNOTES |
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Accepted Jun 14, 2005.
Address correspondence to Steve Berman, MD, Children's Hospital, 1056 E 19th Ave, B032, Denver, CO 80218. E-mail: berman.stephen{at}tchden.org
No conflict of interest declared.
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REFERENCES |
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 TOP REFERENCES |
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- Berman S, Armon C, Todd J. Impact of a decline in Colorado Medicaid managed care enrollment on access and quality of preventive primary care services. Pediatrics. 2005;116
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[Abstract/Free Full Text] - US Census Bureau. Age and sex of all people, family members and unrelated individuals iterated by income-to-poverty ratio and race: 2003. Below 100% of poverty: all races. Available at: http://pubdb3.census.gov/macro/032004/pov/new01_100_01.htm. Accessed June 7, 2005
- American Academy of Pediatrics. Full-year and part-year uninsured US children through age 21, 1998–2002. Available at: www.aap.org/research/MEPS1998forward.pdf. Accessed June 7, 2005
- Olson L, Tang S, Newacheck P. The importance of continuous health insurance for children's access to care. Presented at: Pediatric Academic Societies annual meeting; May 16, 2005; Washington DC
- Centers for Disease Control and Prevention. One million US children not fully immunized [press release]. April 11, 2003. Available at: www.cdc.gov/od/oc/media/pressrel/r030411.htm. Accessed June 7, 2005
- US Census Bureau. School enrollment: 2000. Quick tables and demographic profiles (QT-P19). Available at: http://factfinder.census.gov/servlet/SAFFPeople?_sse=on. Accessed June 7, 2005
- Peterson PG. Running on Empty: How the Democratic and Republican Parties are Bankrupting Our Future and What Americans Can Do About It. New York, NY: Farrar, Straus, Giroux; 2004
PEDIATRICS (ISSN 1098-4275). ©2005 by the American Academy of Pediatrics
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