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To Protect Children, Senate Republicans Must Drop Medicaid Per Capita Cap

The Senate Republican health bill, like the House-passed bill, would convert Medicaid to a per capita cap, but it would cut Medicaid even more deeply and pose an even greater threat to coverage for all Medicaid beneficiaries — including children.  Senate Republicans claim that by excluding certain children with disabilities from the per capita cap, they’re “guaranteeing” continued Medicaid coverage for them.  But they’re not.  Children with disabilities — and the tens of millions of other children who rely on Medicaid — would face the growing risk of losing coverage or needed health care services.  The only way to protect coverage for all children on Medicaid is to reject the per capita cap and maintain the program’s flexible federal-state financial partnership.

Under the Senate bill, starting in 2020 the federal government would no longer pay a fixed share of states’ overall Medicaid costs.  Instead, it would pay only a fixed amount per beneficiary, with that amount growing more slowly than projected Medicaid costs.  States would receive less federal Medicaid funding than under current law, with the cuts growing each year.

The Senate bill would lower the growth rate further in 2025, dramatically expanding the House bill’s already damaging cuts in later decades.

The per capita cap has separate funding caps for seniors, people with disabilities, children, other adults, and adults enrolled through the Affordable Care Act’s Medicaid expansion.  Each state’s overall funding would be the sum of the per capita cap for each population group, multiplied by the number of enrollees in that group.  Thus, even if the cap amount for one group were adequate, a state would face an overall federal funding shortfall if the amounts for other groups weren’t adequate and would likely have to cut Medicaid across its entire program.

Senate Republicans claim they’re protecting children with disabilities — likely referring to children who meet the Supplemental Security Income (SSI) program’s strict eligibility standards for disability — from the cap by excluding them from it. For example, Ohio’s Senator Rob Portman said that excluding these children from the cap means “They’ll get better care.”  Thus, he’s acknowledging that the cap would worsen care for groups subject to it — including seniors, adults with disabilities, and other children. If the per capita cap is so dangerous that Senate Republicans want to protect vulnerable children from it, they shouldn’t impose it at all.

Any per capita cap would force states to balance their budgets with much less federal Medicaid funding over time.  This growing strain would likely prompt states to cut Medicaid across the board, threatening care for all beneficiaries, including the children with disabilities who wouldn’t be covered by the state’s cap.  As a result, children meeting SSI disability standards would still be subject to Medicaid cuts, as would the hospitals, physicians, and other providers that serve them.  And of course, the tens of millions of other children, including children with disabilities and special health care needs, would be at severe risk of ending up uninsured or going without needed care.  Senators who truly want to protect Medicaid coverage for children need to reject the Senate bill’s per capita cap entirely.