Sacramento Head Start Alumni Association

Radical Administration Medicaid And CHIP Proposal Threatens To

Mar 11, 2003

February 12, 2003



Radical Administration Medicaid And CHIP Proposal Threatens To Dismantle Health Care For Millions of Low-Income Children

The Bush Administration 2004 budget includes a radical proposal that gives states unprecedented latitude to scale back critical health coverage and to impose substantial cost-sharing requirements that could restrict children?’s access to needed health care. This proposal would put at risk at least 1 in 3 of the nearly 30 million children getting health care in Medicaid and the Children?’s Health Insurance Program (CHIP). The Bush budget fails to adequately address the health care needs of the 9.2 million children who have no health insurance, and the proposal could actually increase the number of uninsured children if states decide to shift funds from children or impose unaffordable cost-sharing on families.

The Medicaid and CHIP proposal threatens to unravel a key part of the safety net that assures low-income children a healthy start in life. Medicaid assures eligible children the healthy start they deserve. Currently, states are required to serve all poor children and are guaranteed federal help if they decide to extend health care to additional low-income children. The Bush proposal would limit the federal funds states would receive in the future for coverage of low-income children regardless of increases in medical costs and increases in enrollment or needed services.

The Bush Administration proposal will pit children against older Americans, persons with disabilities, and other uninsured adults and will allow states to divert CHIP funds from children?’s coverage. The Bush proposal to radically restructure Medicaid and CHIP creates a short-term financial incentive for states to blend their Medicaid and CHIP funds into a capped pool of money to provide health care for children, seniors, disabled people, and uninsured adults. All these vulnerable populations will be competing for limited dollars. States agreeing to accept capped federal assistance will certainly be in financial trouble as medical costs rise and more families are in need of help with health care in difficult economic times. The likely result will be cuts in covered services, increased costs imposed on families, limits on enrollment, or reduced eligibility

Many children will be at risk of losing comprehensive health and mental health services and basic protections as dollars are spread to give less help to more children and adults. Currently, medical services for children in Medicaid, and some CHIP children, must include well-child and well-baby care, immunizations, screenings for hearing, vision, and dental care, as well as all medically necessary treatment for any illnesses, injuries, or disabilities identified in children. Some CHIP children receive a more limited package of benefits. Comprehensive quality services are essential for many children, especially those with disabilities and other special health or mental health needs. Cutting back on some to help more will place many children squarely in harm?’s way and will end up costing society more in the future.

New cost-sharing requirements could make it more difficult for low-income families to afford continued coverage for their children. Currently, children are exempt from cost-sharing in the Medicaid program. Families with children receiving coverage through CHIP generally have modest premium and co-payment obligations, making it affordable for parents to access critical health services for their children, some with severe disabilities. The Bush proposal would give states the freedom to impose substantial premium and co-payment burdens on millions of families with children enrolled in Medicaid or CHIP.
Children are being used to help solve a fiscal crisis that they did not cause. Although children?’s health care costs are far less than those of others on Medicaid, the proposed Bush block grant will include both Medicaid dollars and all of the Children?’s Health Insurance Program dollars. While children are more than half of the Medicaid enrollees, they account for less than a quarter of Medicaid spending and children?’s expenses are one-sixth the costs of older and disabled beneficiaries