GOP Medicaid Plan Could Reduce Aid for Children, Experts Say

GOP Medicaid Plan Could Reduce Aid for Children, Experts Say

By Kerry Young, CQ Roll Call, March 21, 2017

The outlook for federal support for children's health care grew cloudier Monday night when House GOP leaders added a block grant option to their health care bill, experts said. The GOP Medicaid proposals are likely to reduce aid for children's coverage in the years ahead, and Congress is also likely to provide less generous terms to states when it renews the Children's Health Insurance Program later this year, experts said.

Republicans' anticipated actions this year would represent the first erosion of federal support for children's coverage since the creation of Medicaid, analysts said in interviews Tuesday.

The House GOP measure (HR 1628) proposes ending open-ended federal support of Medicaid through a switch to caps pegged to enrollment in the state-federal program, past spending and medical inflation rates. Federal spending on Medicaid would drop by $880 billion over a decade when compared to current law, according to the Congressional Budget Office, resulting in a 25 percent cut by 2026.

Some of those cuts would phase out the expansion of Medicaid under the health care law. About 10 percent of Medicaid spending goes for adults who gained coverage under the expansion, according to federal estimates.

In a bid to woo conservatives, House GOP leaders on Monday added an option for states to use a Medicaid block grant, which would give governors more leeway to reduce children's coverage. Diane Rowland, executive vice president at the Kaiser Family Foundation, said the GOP bill also would ease the rules on the services now mandated for children's care, including diagnosis and follow-up care.

"It is really a signal that many of the members up here are willing to cut back on the federal entitlement and coverage that has been expanded and a hallmark of our national policy," Rowland told CQ Roll Call Tuesday.

There's little doubt that a major reduction in Medicaid funding, such as the House proposes, may eventually affect children's care. Republicans have centered much of the discussion about their Medicaid plan around what they all the "able-bodied" population, or adults who qualified through the 2010 law's expansion of the program due to their low incomes. The amendments to be offered to the House bill at the Rules Committee tomorrow include a work requirement for adults.

Children made up nearly 50.5 percent of the combined December enrollment of Medicaid and CHIP, which stood at 74.2 million, noted Edwin Park, vice president for health policy at the liberal Center on Budget and Policy Priorities.

"Kids are being overlooked here," Park said. "Kids are half of the Medicaid program, and if you are imposing per capita caps, kids are going to be affected. They are going to fall off the program. It does deserve more attention."

With the election of President Donald Trump and a growing conservative tilt in GOP ranks, Republicans see this time as a "golden opportunity" to reshape health policy, said Frank Thompson, a professor at Rutgers University who studies federal programs. Republicans fell short in attempts to switch Medicaid to block grants in the 1980s, 1990s and 2000s. The idea has been championed by Speaker Paul D. Ryan, R-Wis., who skews more libertarian than some GOP lawmakers with a noted affection for the work of writer Ayn Rand, Thompson noted.

After Republicans finish their attempts to revise the 2010 health law (PL 111-148, PL 111-152), lawmakers will face a September deadline to renew funding for the CHIP.

Republican lawmakers may seek to ensnare CHIP reauthorization later this year in partisan health fights, and use Democrats' support for it as leverage to try to win other policy battles.

Some Republicans want to scale back federal funding to states for CHIP. The 2010 health care law boosted federal contributions, adding a 23 percentage point increase for states. Those higher payments are unlikely to continue in a fiscally conservative Congress and administration.

As a stand-alone effort intended for children, though, it may be more politically difficult to reduce CHIP funding than to reduce spending for the overall Medicaid program, said Thompson of Rutgers.

"Even the hardest of hard Ayn Rand enthusiasts would find it a little hard to get themselves worked up about the evils of giving health insurance to children," he said.