The American Health Care Act, the intended replacement for the Affordable Care Act that was passed by the Republican House, could cut as much as $43 billion over the next 10 years for the care of nondisabled children if recent proposals capping federal Medicaid spending per capita become law.
That’s according to research from strategic advisory company Avalere Health, which points out that Medicaid capped funding arrangements, including per capita caps and block grants, are part of the AHCA when it passed the House. Children are the largest group in the country covered by Medicaid.
The Hill reports that Republicans say the per capita cap is necessary to prevent Medicaid spending rising to what they call unsustainably high levels. But in real terms what the cap would do is cut nondisabled children’s access to health care.
Avalere says that the AHCA would put a Medicaid per capita cap model into effect in 2020, along with the option for a state to select a block grant that same year. The baseline per capita cap funding figures would be set by 2016 federal Medicaid spending for each of the five beneficiary groups: adults, children, aged, disabled and newly eligible adults.
According to Avalere’s modeling, federal funding for “traditional children” (those who are eligible because of family income, not because of disability) would be reduced by $43 billion over a 10-year period if the AHCA actually makes it into law.
The cuts would become more draconian over time, even though spending growth for children is projected to be 4.8 percent on average over the next 10 years. That’s higher than the Consumer Price Index for medical inflation (CPI-M), used to determine spending for adults, children and newly eligible adults. CPI-M plus 1 percent would be used for the aged and disabled, according to a Manager’s Amendment that is part of the bill that passed the House.
“Over time, per capita caps could significantly reduce the amount of funding that goes toward Medicaid coverage for children,” Dan Mendelson, president at Avalere Health, said in a statement. Mendelson added, “While local control and more efficient operation of Medicaid programs are laudable goals, coverage and access for low-income children are ultimately dictated by federal funding, and reductions of this magnitude could disrupt access.”
The Avalere report says that “[c]hildren in Medicaid could be disproportionately affected by cuts to funding and benefits leading to instability in coverage and access, which can cause higher rates of unmet healthcare needs and worse health outcomes compared to children that have continuous coverage.”