• Issue Brief
  • February 6, 2017

Make Medicaid Work for Children Issue Brief

Medicaid covers over 30 million children, providing them with access to needed medical services so they can grow to become healthy and productive adults. Preserving a strong Medicaid program is essential to ensuring all children have health coverage and access to care, but Medicaid faces serious financial threats that endanger the future of our nation's children. Federal and state governments are pursuing innovations focused on new care delivery and payment models to improve care while also creating a more efficient Medicaid program. These efforts should be encouraged to preserve a strong Medicaid program for children, but more needs to be done to accelerate implementation, improve national data sharing and support the most effective and efficient care.

The key to making Medicaid work for children is a framework that supports the sharing of data, clinical standards, and quality measures designed for children. Innovative solutions and streamlined care coordination models - not budget cuts - will achieve savings and improve care. Children's hospitals are experienced at working together to provide high quality care and are uniquely positioned to work with state and federal governments to innovate solutions that transform pediatric health care and cut costs.

Medicaid is vital to children's health

Medicaid is a lifeline providing affordable coverage to children in low-income families and to children with special health care needs. Medicaid also provides children access to a strong and comprehensive set of services through the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit. This ensure children receive preventive services, such as immunizations and well-child checkups, medically necessary care, such as pediatric specialty, ancillary and therapy services, and behavioral health, vision, and dental services. In addition, for children with complex medical conditions, Medicaid provides coverage or fills coverage gaps for services not covered by private insurance.

Medicaid cuts endanger kids

Cuts to Medicaid providers are a common cost-control strategy, but these cuts are not a long term solution to improve children's health and instead threaten access to care for children. If Medicaid funding is cut or capped at the federal level, it can mean a loss of federal funds for states and an increase in the number of uninsured children. These efforts can further strain an already stretched safety net. Barriers for children to access needed preventive, primary and specialty care can drive up health costs in the long run and interfere with healthy development that prevents children from achieving and maintaining their highest level of functioning.

Medicaid recipients rely on children's hospitals

Children's hospitals are at the core of the health care delivery system for children, bringing together teams of specialists to provide care not available in any other setting. Although children's hospitals are less than 5 percent of all hospitals in the U.S., they account for about 35 percent of all hospital days for children on Medicaid and 53 percent of all hospital days for children with complex medical conditions, such as cancers, heart defects, or complications arising from prematurity. 

Because of the small number of children's hospitals, each serves a much broader geographic area than adult hospitals. For families, particularly those with children with medical complexity, this often means traveling long distances or across state lines to meet their child's specialized health care needs. For children's hospitals, this means coordinating with multiple state Medicaid programs that, on average, reimburse children's hospitals only 80 percent of the cost of care provided (including Disproportionate Share Hospital payments).

Children's hospitals advance Medicaid solutions

Children's hospitals are working with Congress, the administration, and states to advance delivery system and payment reform innovations in Medicaid to cut costs, promote efficiency, and improve care for children, particularly children with medical complexity. Children's hospitals are advocating for the Advancing Care for Exceptional Kids Act (ACE Kids Act), legislation to create a state opt-in model with a consistent, national framework to coordinate care for children with medical complexity in Medicaid to improve quality while reducing costs and creating a national data framework. This population represents the most vulnerable 6 percent of children in Medicaid but accounts for 40 percent of Medicaid spending on children, offering a tremendous opportunity to make a significant impact on overall utilization and cost by improving care for a relatively small population.

Many children's hospitals are involved in state-by-state or multi-state demonstrations to lay the groundwork for optimizing care for children with medical complexity in order to be ready to expedite implementation once national legislation gives states the option to implement care networks designed to meet the needs of this population.

Children's hospitals:

  • Recognize the importance of Medicaid in providing health insurance coverage for all children - but especially for those who are most vulnerable
  • Understand the challenges of funding prioritization faced by federal and state governments
  • Are working with federal and state governments to improve the Medicaid program so that it can contribute to meet the needs for the next generation of children
Association Contact: Shannon Lovejoy, (202) 753-5385