Top Five Threats to Child Welfare from ACA Repeal & Proposals to Alter Medicaid

By Olivia Golden, Executive Director, Center for Law and Social Policy (CLASP)

Proposals by the Congress and President-elect to repeal the Affordable Care Act (ACA)—including the Medicaid expansion—to turn Medicaid into a block grant, and to cut resources, all can sound very abstract to social workers and policymakers coping with the day-to-day tragedies and crises of child welfare. But should Congress make good on any of these threats—which could happen as early as January 2017—the dangers are very real to abused and neglected children, their birth, adoptive, and foster parents, as well as state agencies and providers.

The five top threats to child welfare are:

5. End health coverage for young adults aging out of foster care, up to age 26. Under the ACA, states are required to provide Medicaid coverage for young adults who were in foster care within the state, have now aged out, and are under age 26—just as young adults who are not in foster care can stay on their parents’ plans until age 26. This common-sense policy to help young adults overcome the emotional and physical effects of childhood trauma will be eliminated by ACA repeal.

4. Undermine health coverage for children in foster care, through a block grant structure. Child welfare agencies have always been able to count on Medicaid coverage for children in foster care who are entitled to the full array of health and mental health prevention and treatment services. That’s because under Medicaid’s current structure, states are guaranteed federal financial help to pay for the care foster children need. They don’t need to trade off that help against (say) the needs of a growing population of low-income seniors. But if Congress changes Medicaid’s structure to a block grant, which means sending the states a capped amount of money to serve everyone, nothing would be guaranteed. States would have to find space within a fixed amount of money for everyone helped by Medicaid, including low-income seniors, adults, and children, with no help in sight from federal funds if the number of foster children (or any other group) increases or their needs become more intensive. To make it worse, the historical evidence suggests that block grants generally decrease sharply in value over time – like the TANF block grant, which is worth 30% less than when it was enacted.

3. Threaten health and mental health coverage for parents, a key to prevention and reunification. In states that have expanded Medicaid under the ACA to cover low-income adults, including birth parents, the program provides a funding stream for the substance abuse, mental health, and medical services that parents need to help them provide a safe and nurturing home. Repealing the ACA turns back the clock to the days when there was no steady way for child welfare agencies to support behavioral health and medical treatment of parents.

2. Endanger the commitment to health coverage through Medicaid for children with special needs who are adopted with federally supported subsidies, potentially destabilizing adoptions. A key element of the nation’s success in providing permanent adoptive families for abused and neglected children in foster care with special needs who cannot safely go home has been the national commitment to Medicaid health coverage through age 18, or 21 at state option. States that offer state-funded adoption assistance payments for children with special needs may also make them eligible for Medicaid. Because of the medical fragility and behavioral health challenges of many children adopted from state child welfare systems, this guarantee is important to the ability of adoptive families to make a permanent commitment to children. Just as with foster children, in a block grant system where states have to fit more and more needs into a shrinking pot of money, adoptive children, too, could end up taking their chances in annual state budget debates – potentially destabilizing the nation’s adoption successes.

1. And the top threat to child welfare: state budgets as a whole could be destabilized should Medicaid be turned into a block grant, capping the federal payment even when the next recession throws far more people into need, or when an aging population ratchets health care demands up sharply. As a result, state investments in prevention, in nonprofit providers and the services they offer to children and families, and in state staff and capacity could all be casualties of the broad-based budget cuts.

We should not impose risks like these on any of our children—but most of all, we must not damage children who need us the most.