Proposed Medicaid reforms could devastate young people with complex medical needs

Editor’s note: A version of this blog post originally appeared on PolicyLab at Children’s Hospital of Philadelphia’s blog. PolicyLab is a Center of Emphasis within CHOP’s Research Institute.

Today’s guest bloggers are Rebecca Kim, an MD/MPH student at the University of Pennsylvania; Sophie Jan, MD, MSHP, a faculty member at PolicyLab at Children’s Hospital of Philadelphia, a pediatrician for children with special health care needs at Children’s and a general internist at the University of Pennsylvania Health System; and Ahaviah Glaser, JD, the director of health policy for the Office of Government Affairs and PolicyLab at Children’s.

Current proposals to simultaneously repeal the Affordable Care Act and reform the federal Medicaid program would be devastating to children and young adults with disabilities and complex medical needs. Even if the final ACA replacement plan continues to allow young people to stay on their parents’ insurance plans until age 26 – which is a benefit largely supported on both sides of the political aisle – the most medically complex among them rely on Medicaid because of the extraordinary level and cost of care needed.

Today, Medicaid covers 10.2 million adults and children with serious illnesses or disabilities whose health needs create significant financial burden for patients and their families.

  • It funds physical therapy, occupational therapy and speech therapy that children with cerebral palsy and other developmental disabilities may receive through school.
  • It covers private-duty nursing and assistive technologies — such as ventilators, feedings tubes and communication devices — that children with disabilities may need to attend school and avoid placement in institutional settings.
  • Medicaid frequently fills in the gaps when children with disabilities or complex medical needs face inadequate coverage from their private insurance plans. These individuals and their families have much to lose with the Medicaid reform proposal currently on the table.

First, the ACA replacement plan recommends converting Medicaid to a “per capita cap” program, which would provide states with a predetermined amount of funding for each Medicaid enrollee and give states more flexibility to decide Medicaid eligibility and service options. Supporters have always presented these proposals as a way for the federal government to save billions of dollars and give states more control. Sounds good, so what’s the catch?

Under a Medicaid per capita cap, the federal government will likely determine the limit of reimbursement for each child enrolled in Medicaid based on the average health care cost of a child eligible for Medicaid today. It is reasonable to assume that the reimbursement rate per child will be set fairly low, since children make up 50 percent of the Medicaid population, but only contribute to 20 percent of the program’s costs. This may leave insufficient funding for medically complex children whose health care costs are significantly higher than those of other children.

To illustrate, a Medicaid-eligible child costs Pennsylvania $3,561 per year on average. By contrast, a family with a child who has suffered spinal cord injuries may require over $7,000 per month for the mechanical ventilation keeping their child alive. Medicaid per capita caps would not account for the differential health care needs of this family.

Second, all children covered by Medicaid could lose essential health services they are currently guaranteed through the Early and Periodic Screening, Diagnostic and Treatment program. EPSDT is a comprehensive set of screenings and preventive services that catch problems early, before they have the chance to escalate. States must also guarantee children have access to all treatment services that Medicaid providers deem medically necessary from these screenings and services.

EPSDT services could be eliminated with major cuts to Medicaid spending because states would have more flexibility to decide who qualifies for Medicaid and which services to cover. Medicaid coverage would, therefore, be up for negotiation when states are faced with difficult budgetary decisions. Children with disabilities could lose access to essential services and, in all likelihood, would be left with no affordable insurance options that meet their health care needs. In Pennsylvania alone, over 13,000 people with intellectual disabilities are already waiting to receive Medicaid-funded services.

Finally, per capita caps would likely force school districts to compete with hospitals and health care centers for precious Medicaid dollars. For decades, Medicaid has also allocated funding to schools that provide special education and certain medically necessary services to children with disabilities under the Individuals with Disabilities Education Act. By reducing federal spending and eliminating the possibility of adjusting funding levels based on changing needs, school districts would be forced to pay for special education programs with funds allocated for general education, potentially reducing the amount of money available to pay for teachers, counselors, nurses and extracurricular programming for all students.

Lawmakers will confront many difficult decisions in the coming weeks and months, but whether to pursue reforms that will inevitably cut access to care for our most vulnerable populations should not be one of them. Sweeping cuts to a program that nearly half of all U.S. children — and most children with very complex medical conditions — rely upon for the health care they need to survive and thrive is not the answer.

We must find thoughtful ways to improve the efficiency and quality of health care in order to achieve the shared goals of bringing down health care costs and improving health outcomes for everyone.


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