The American Health Care Act Will Hurt Kids

1.2 Million Medicaid Enrollees in PA are Children

The American Health Care Act proposed by Congress that would restructure Medicaid as a per capita cap program would sever the historical federal-state partnership of program funding, creating barriers for the 1.2 million children in Pennsylvania who rely on Medicaid for health care coverage and put the state’s fiscal viability in deeper peril than it already is. The state’s budget deficit is currently $3 billion.

“Capping funding for Medicaid will cap coverage when health care costs rise or a child has greater than average health care needs,” said Pennsylvania Partnerships for Children President and CEO Joan Benso.

“For example, a child who is in a car accident, faces a multiple-day inpatient stay, surgery and extended physical therapy would likely exceed the cap. The same would likely be the case for children who have chronic diseases such asthma. In these instances, the state or the child’s parents would have to cover those costs. Kids should get the benefits kids need, no matter what,” she said.

Specifically, the American Health Care Act would:

  • Implement a per capita cap for Medicaid – limiting federal funding and leaving the state at risk if costs for services grew more than the inflation factor. The factor is less than the full rate of actual health care cost growth. This means as promising new treatments arise that are costly, the state would have to decide if they will provide them and foot the bill. The state’s emergency response to additional treatments needed in a public health crisis or outbreak would be drastically reduced.
  • Roll-back Medicaid eligibility for kids based on family income.
  • Put funding for children with greater needs such as those who are medically fragile or receiving medically-eligible early intervention or special education services at risk as costs of those services grow or exceed caps.
  • Limit funding for Medicaid, leaving Pennsylvania on the hook to pick up additional costs. The state has been experiencing repeated budget deficits and is not fiscally capable of picking up the added expenses.
  • Reduce the federal share of Medicaid expansion costs and potentially limit parent enrollment which would have a negative impact on kids.

Benso noted that changing the funding structure of Medicaid breaks the handshake between the federal government and the state to fund the program at a time when Pennsylvania has reached an all-time low of only 4.1 percent for the number of kids lacking health insurance.

“Restructuring Medicaid as a per capita cap program is being promoted as giving the state more ‘flexibility’ or ‘control.’ The state already has control over these programs, and for 50 years has operated health care programs in a way that works best for our child population,” she said.

If Medicaid is changed to a per capita cap funded program, federal funding would be based upon a set amount for each enrollee. The proposed language creates eligibility categories including children, blind and disabled, seniors, Medicaid expansion enrollees and other adults. Pennsylvania’s historical costs in the Medicaid program, subject to a potentially inadequate inflationary factor, would serve as the base amount of federal funds received.

“The U.S. House of Representatives is moving this bill ahead in the coming days without hearings or more careful consideration on how it will negatively impact our citizens in greatest need. These changes will not be in the best interest of the commonwealth or our children. We urge our members of Congress to reject the proposal,” said Benso.

Pennsylvania Partnerships for Children is a strong, effective and trusted voice to improve the health, education and well-being of children and youth in the commonwealth. For 25 years, PPC’s public policy victories have helped countless children learn, thrive and succeed, regardless of circumstances. PPC is statewide, independent, non-partisan and non-profit.