Ed Walz
(202) 657-0685 (office)

Washington — A new analysis released today by First Focus shows how the Medicaid “block grant” proposal offered by U.S. House of Representatives Budget Committee Chairman Paul Ryan would put the health care of more than 30 million children at risk. Block Grants are Bad for Kids responds to recent arguments for block-granting Medicaid offered by Reason Magazine Senior Editor Peter Suderman, American Enterprise Institute Resident Scholar Scott Gottlieb, Manhattan Institute Senior Fellow Avik Roy, and the Heritage Foundation’s Nina Owarchenko. The paper observes that 31 million of the nearly 60 million Americans covered by Medicaid are children.

“More than half of the Americans covered by Medicaid are children, so you can’t make deep cuts to Medicaid without hurting kids’ health,” said First Focus President Bruce Lesley.

The analysis, authored by Peter Harbage, Sarah Arnquist, and Ashley Cohen, finds that the block grant proposal would weaken investments in children’s health in several ways:

  1. Rationing Coverage – Current law guarantees health insurance to children who meet Medicaid’s income and citizenship requirements, but a block grant plan would give politicians and government bureaucrats the ‘flexibility’ to grant coverage to some children but deny it to others.
  2. Rationing Funding – Currently, federal Medicaid funding responds in real-time to real-world changes, including changes in the economy, providing more funds when an economic downturn’s job losses make more families uninsured. That is why Medicaid – along with the Children’s Health Insurance Program – has largely prevented an increase in the number of uninsured children during the recession. But a block grant plan would end that flexibility, forcing cash-starved states to fill the gap or further ration care.
  3. Rationing Care – Current law requires states choosing to offer Medicaid coverage to cover a standard, pediatrician-recommended benefits package that includes the screenings and preventive care that kids need to stay healthy. A block grant plan would eliminate this requirement, but it would not eliminate other requirements that states provide life-saving care through emergency departments. As the federal government provides less and less funding, states will be forced to ration cost-effective screenings and preventive care, as they struggle to finance relatively expensive emergency room care.
  4. Rationing Doctors – Politicians and government bureaucrats in some states already pay doctors – especially specialists – much less under Medicaid than do private insurers for the same care. As a result, kids covered by Medicaid in those states often have trouble getting specialty care. By reducing federal investments in children’s health, a block grant plan will accelerate this tendency to ration children’s access to their doctors.
  5. Rationing Cost-Control Innovation – Medicaid’s current demonstration waiver authority gives states the flexibility to pioneer new and more cost-effective ways of delivering care. Successful waiver initiatives, like the BadgerCare Plus waiver in Congressman Ryan’s home state of Wisconsin, have resulted in better health for kids and lower costs for taxpayers. But a block grant plan would deny states Medicaid funding for such improvements, reducing the likelihood of innovative, win-win solutions and increasing states’ reliance on health care denials as cost-containment tools.

“There’s no doubt that block-granting Medicaid would mean health care rationing and outright denials for kids,” said Lesley.

Peter Harbage, the paper’s principal author, is the founder and president of Harbage Consulting. Sarah Arnquist is the Associate Director of Health Policy Communications at Harbage Consulting, and Ashley Cohen is a Senior Policy Consultant at Harbage Consulting.