Bill Would Cut Medicaid Benefits for Children

The House of Representatives is scheduled to vote this week on a bill that would reduce the federal deficit by an estimated $39 billion over the next five years. The largest single set of reductions would affect health programs for the poor — and poor children in particular.

The House originally voted on the bill Dec. 19 at about 5 a.m. — just hours after it emerged from a closed-door conference committee. Senate Democrats, however, exploited a technicality to get the bill sent back to the House, which had already adjourned for the year.

The unexpected delay gave advocates an unusual opportunity to analyze the bill before the final vote.

Cindy Mann, a research professor at Georgetown University and executive director of the university's Center for Children and Families, says they now know those middle-of-the-night negotiations produced "some big winners and some big losers. And the big winners were consistently the powerful interests, represented by some of the provider organizations, and the losers were consistently the low-income Medicaid beneficiaries."

For example, negotiators canceled billions of dollars of cuts aimed at drug makers and health insurers that were included in the original Senate bill. But lawmakers still had to meet their budget targets, says Mann. So they cut instead from beneficiaries of the Medicaid and State Children's Health Insurance Programs.

Those cuts would have far reaching effects, says Mann. "The changes would make it harder for some children to enroll in the program; they would make the program and the delivery system more fragmented; they would cause certain children to lose out on some benefits that are now covered by the program."

In a final estimate produced just last week, the Congressional Budget Office says that more than $3 billion in Medicaid savings would come at the expense of beneficiaries, much of it from reducing services and enrollment.

Advocates like Mann are particularly upset about one piece of the bill that appears to allow states to offer less coverage to poor children than is currently mandated by federal law. "We never saw this provision until it emerged after the middle of the night negotiation," she says. "It was not debated in the House, it was not debated in the Senate. Nobody saw this language. We still don't know exactly what it means."

What is clear is that states could offer "benchmark" plans that cover less than is currently required. Then they could offer separate, as-yet-unspecified, additional coverage for poor children to meet federal minimums.

Rep. Nathan Deal (R-GA), who helped negotiate the package, says the bill would not, in fact, eliminate any current protections. "We believe the statute in the reform we have made is clear — that for children under 19, any state that adopts a benchmark-type approach would still be required to cover those children under those provisions."

Deal also says the Medicaid cuts in the bill are more than justified. "As the name implies, (it) is a deficit-reduction act. And people want us to reduce the deficit. We believe that Medicaid is, as the governors have said, unsustainable over the long haul, and these are the kind of reforms that if we don't make them, will make the program unsustainable for states."

Deal also says that even if the new law does somehow reduce required services, he doubts states will cut care to poor children.

Republican Gov. Jeb Bush of Florida, who was in Washington last week to talk about his state's Medicaid overhaul, agreed. "I've heard that somehow if there's reforms in Medicaid that all the states will race downward," he said. "The record shows the opposite. The record shows that by and large, particularly in good times, there has been an interest in expanding benefits or expanding beneficiaries in the Medicaid program."

On the other hand, Gov. Bush's program would actually cap Medicaid spending for some beneficiaries — leaving it to health care providers to absorb the loss if patients need more care than the state is willing to pay for.

Meanwhile, advocates for the elderly are joining children's advocacy groups in fighting the federal budget bill. That's because it would also make it more difficult for seniors to qualify for Medicaid nursing home care. The House vote, currently set for Wednesday, is expected to be close.

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