• Article
  • July 17, 2019

Report: Block Granting or Capping Medicaid Would Affect Kids Health Care Coverage

Implementing block grants or per capita caps could cut as much as $163 billion in funding for children in Medicaid programs.

As the nation—through national legislation and state policies—considers large-scale changes to health insurance systems, it is critical to examine how children could be affected. One proposal being considered by some at the state- and national-levels is block granting or placing per capita caps on the Medicaid program.

Implementing block grants or per capita caps would mean limiting the amount of a money the federal government would provide to states to support Medicaid coverage. Research released this week by health care consulting firm Avalere says children’s health would be affected should Medicaid be changed in this way. Nationally, children’s Medicaid could receive a funding cut of $89 billion over 10 years under a per capita cap model, and as much as $163 billion under block grants.

Report details states’ losses

In a year, 37 million children in the U.S. rely on Medicaid for health care coverage. These children come from every family background and state—they live in cities, rural communities and suburbs. Avalere’s analysis looks at funding for non-disabled children and details how potential funding cuts to Medicaid would affect individual states.

Over the next 10 years, the report estimates a large state like Texas could lose as much as $19 billion in funding for children’s care if its Medicaid program transitioned to a block grant. A smaller state like Rhode Island could expect a $20 million loss—about 25% of Rhode Island’s Medicaid funding for kids.

The report illustrates that, under block grants or per capita caps, states would have to make difficult decisions affecting children’s health care. To compensate for these cuts, states may reduce eligibility for coverage, limit access to covered benefits or services, increase beneficiary cost sharing or decrease payment for care, or seek other sources of funding.

The takeaway

Children represent the future of the country and, according to the report, Medicaid block grants or per capita caps could threaten their health. Children’s hospitals encourage lawmakers at the state and national levels, along with the administration, to consider what any Medicaid change could mean for children.

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