Protect Federal Medicaid Funding—
Millions of Texas Children Depend on It
It appears an overhaul to the U.S. health care system, potentially replacing the Patient Protection and Affordable Care Act (ACA), or Obamacare, with the American Health Care Act (AHCA) may happen soon. As currently written, the AHCA also reduces federal Medicaid funding by more than $840 billion over 10 years.
As a Texas legislator, you know just how much complex information is out there about health care reform and its effects, but one thing remains clear: more than 3 million Texas children—approximately half of our state's kids—depend on Medicaid to stay healthy.
We must ensure that our kids are not worse off under the AHCA than they were before Obamacare was passed.
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10 Things to Know About the
American Health Care Act
With all of the information regarding the AHCA, it can be hard to separate fact from fiction. Some say children will not be affected, while others are less optimistic.
Medicaid is the largest insurer of U.S. children, covering more than 30 million children nationwide. It is estimated that these children would likely see an $80 - $100 billion reduction in federal Medicaid funding over 10 years under the AHCA.
According to the Urban Institute, the passage of the AHCA could mean $15 billion in cuts to Texas Medicaid over 10 years, which would hurt Texas children and the eight non-profit hospitals that treat hundreds of thousands of children from across the state, the nation and the world each year.
Here are some useful facts about the AHCA and its potential effects:
1. The current draft imposes a per capita cap on the Medicaid program. A per capita cap sets limits on federal Medicaid contributions per enrollee and defines an annual growth rate for those limits to gradually reduce federal Medicaid spending over time.
2. Currently, children are funded at half the per capita spending compared with other eligibility categories listed in the bill.
3. Under the current AHCA draft, children will suffer the same pro rata reduction as other eligibility categories.
4. As the senior population continues to grow, their health care expenses will also grow. Unless children's health care spending is segregated and protected, the funds may be siphoned away to cover spending for other eligibility categories.
5. The AHCA would allow states to choose a block grant for one or two eligibility categories: children and/or non-elderly, non-disabled, and non-expansion adults. Texas Medicaid covers only federally mandated eligibility categories with two exceptions: pregnant women and infants and the elderly. Texas covers them up to higher levels of the federal poverty level. Thus, there are very few non-elderly, non-disabled, non-expansion adults covered by Medicaid in Texas, meaning that the only real target for a block grant is children. The population of children in Texas is scheduled to grow by another 1.5 million over the next 13 years, and many of those children will be eligible for Medicaid. A block grant WILL NOT keep pace with that growth. Therefore, the state and children’s health care providers will be unprotected in the event of an economic downturn or public health crisis.
6. Texas has been on the forefront of Medicaid reform for decades by moving more enrollees into private managed care plans (estimated to be 93 percent of all enrollees by the 2018-19 state biennium). Growth in per capita Medicaid expenditures falls below both commercial insurance and Medicare levels in Texas. The Texas Medicaid program is very lean, especially in terms of provider reimbursement. It is important that Texas not be penalized for its efficiencies.
7. Flexibility in the Medicaid program can be achieved without changes in federal statute.
8. Children’s hospitals and health systems want to be held accountable for the care that they provide to children. By segregating and protecting funding for children, the state will be able to determine the efficiency and effectiveness of that care.
9. Medicaid is the primary payor for children’s hospitals (from 55 percent to 77 percent of all inpatient days), so any decisions that impact Medicaid disproportionately affect children’s hospitals.
10. Children’s hospitals subsidize the pediatric specialists and sub-specialists who provide the highest level of care for the most critically ill children—those with cystic fibrosis or spina bifida as well as kids needing organ transplants, neurosurgery or heart surgery. In many instances, the only place children can get that level of care is at a children’s hospital.
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