Senate’s plan to cap Medicaid could hit children with special health care needs especially hard

Despite all the press about fleeing insurers and Obamacare’s wobbly exchanges, there’s been a belated recognition in the media in recent weeks that the plans proposed by Republicans in the House and Senate would really hit Medicaid programs the hardest — $834 billion in cuts to states by 2026, according to the Congressional Budget Office score of the House plan.

As contributor Trudy Lieberman pointed out last week, such cuts would have particularly dire effects on the elderly, since Medicaid pays for about half of all nursing home stays. But another overlooked group that stands to lose big is children with special health needs. More than a third of children with special needs rely entirely on Medicaid and the Children’s Health Insurance Program for their care; in states such as Maine and Mississippi, that proportion rises to half. The potential impacts increase even more if you factor in kids that rely on Medicaid and CHIP to pick up where their private insurance leaves off.

To be clear, kids with special needs are not a tiny minority of kids. More than 11 million U.S. children, or 15 percent, have some form of special health care need. It’s a category that includes conditions such as autism, development delays, anxiety disorders and cystic fibrosis, for example. And it’s a group that comes disproportionately from families of limited means; three-quarters of kids with special needs live in households that make less than 400 percent of the federal poverty level. 

So what happens if the federal government enacts legislation that gives states a block grant or lump sum for each person, while simultaneously unwinding the ACA’s Medicaid expansion — and its higher federal reimbursement rate — starting in 2021? States would quickly face some very difficult budget decisions. They would be forced either to raise taxes, cut spending elsewhere in their budgets to maintain Medicaid services or make cuts to their Medicaid programs. MaryBeth Musumeci and Danielle Poindexter at the Kaiser Family Foundation summed up the dilemma in a recent issue brief:

Many Medicaid coverage pathways for children with disabilities, and some community-based long-term care services provided through waivers, are offered at state option, making them subject to potential cuts as states adjust to substantial federal funding reductions under a per capita cap.

That means services for special needs would be prime targets for states looking for savings. Children on Medicaid who use long-term care services rack up far higher medical costs — 12 times higher, or about $37,000 per child annually in 2013 — than other kids on Medicaid. The expense involved could make such services newly vulnerable as states look for ways to adjust their budgets to a suddenly austere future. Since private insurance plans don’t cover many of these services, and they’re far too expensive for most families to pay out-of-pocket, some of the most vulnerable special needs children could be forced to go without. And the Senate’s move to exclude disabled children from spending caps won’t protect these same kids from state Medicaid cuts.

Donene Feist, executive director of Family Voices of North Dakota, a nonprofit that helps families find care for children with special health needs, spelled out her worries about the American Health Care Act in a recent letter to The Minot Daily News:

These changes will leave many children with special health care needs, adults with disabilities and the elderly at risk of losing health care. What happens if a child does not receive his or her medications, therapies and feedings? These are life and death issues to our most vulnerable populations; children with special health needs would be among those facing the greatest risk.

Referring to the Senate’s version of the Medicaid cuts, Sara Rosenbaum of George Washington University told the New York Times, “The Senate bill creates an illusion of being less draconian than the House bill, but is arguably more so.” 

All this makes it a particularly timely moment for reporters to talk to families with children with special needs who rely on Medicaid and CHIP to manage their kids’ conditions. What would cuts mean for their family’s health and strained budgets? How would their lives be affected if their daughter or son can no longer get the therapy or treatment they currently receive under Medicaid?

Translating vague policy proposals into real human consequences is one of the most valuable services reporters can provide during a time when people are struggling to grasp how a rushed, secretive piece of legislation may change their daily lives for years to come.