With support from the Lucile Packard Foundation for Children's Health, Manatt Health developed national and state-by-state estimates on the potential impact of key Medicaid cuts under consideration by Congress on children and youth. Specifically, the model estimates how the Congressional "pre-legislative" proposals being considered would affect federal and state Medicaid spending, children's access and care, and, where applicable, estimated children's coverage losses.
Two in five children nationwide rely on Medicaid for their health care needs. That includes eight in ten children in poverty and nearly half of all children and youth with special health care needs. Given the extraordinary role Medicaid plays for children, federal law ensures access to comprehensive pediatric health services – including preventive care, screenings, and treatment – to all Medicaid-enrolled children and youth. Extensive research shows that Medicaid coverage contributes significantly to better health outcomes and positive, long-term effects on children's health, educational attainment, and lifelong well-being.
That coverage and assurance of comprehensive care for children is at risk. Congress is actively considering large reductions in Medicaid funding through a "fast track" budget process known as reconciliation. The reconciliation budget adopted by Congress in April includes instructions for the House of Representatives to draft legislative proposals that produce at least $880 billion in federal savings that are expected to come largely from changes to Medicaid. While the Senate has not targeted deep cuts in Medicaid, the final reconciliation bill will include the extension of tax cuts that would otherwise expire at the end of 2025, putting pressure on Congress to agree on large federal spending cuts to reduce the extent to which the tax cuts increase the federal deficit. Medicaid is in the crosshairs.
While not explicitly aimed at children, proposals that would deeply cut federal Medicaid funding and make changes to parents' eligibility will inevitably put children's coverage and well-being at risk. Medicaid is by far the single largest source of federal revenues for states, so significant cuts to federal Medicaid funding will result in large funding holes for states. Given the breadth of the proposed cuts and the number of children and youth enrolled in Medicaid, it will be impossible for states to protect children from funding cuts. Cuts to the Medicaid program could terminate health care for hundreds of thousands of children and force states to make difficult decisions that will result in reduced access to critical services children need to stay healthy and thrive.
The proposals under consideration include reducing states' ability to rely on provider taxes to pay a portion of their share of Medicaid costs, restricting the ability for states to direct managed care plans to boost provider payments to strengthen access to care, imposing caps on federal Medicaid funding, eliminating the enhanced federal funding states receive to cover adults in the expansion population (which includes parents), and mandating work reporting requirements as a condition of eligibility for parents and other adults.
In this report, "No Place to Hide: Children Will Be Hurt by Medicaid Cuts," we estimate federal and state-by-state spending reductions, expected impacts to children's access and care, and where possible, enrollment impacts to children if Congress adopts sweeping changes to Medicaid as part of the budget reconciliation process.
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