Trump Budget Poses Even More Threats to Children’s Health

Today President Trump’s budget came out and the news for children’s health coverage is devastating. In addition to assuming the enormous cuts and dangerous changes to Medicaid included in the House passed American Health Care Act (that we have blogged about many times), the President is proposing even larger cuts to Medicaid and is proposing cuts to the Children’s Health Insurance Program (CHIP).

The President’s budget underscores our point about the dangers of a per capita cap being imposed on Medicaid.  As my colleague Kelly Whitener blogged about recently, the cap becomes a mechanism to more easily cut service to fund more tax cuts. The AHCA hasn’t even become law and the Trump budget is already trying to cut even more out of Medicaid.

Essentially the budget proposal would upend Medicaid and CHIP and their decades of success, making a sharp U-turn on the progress the country has made in providing access to health care for children. That is truly a shocking statement of values (or the lack thereof) – which is how I think about a President’s budget — because it does not have legal weight in and of itself but is rather a principles document that outlines the President’s priorities.

As readers of SayAhhh! know, having access to Medicaid coverage has improved health and educational outcomes for children, and is a smart long-term investment for the government because of the improved economic outcomes of these children when they grow up. You can read more about this in our report, but apparently the Trump Administration is choosing to ignore the facts here.

As readers of SayAhhh! also know, children’s coverage rates are at an all time high of 95% thanks to Medicaid, CHIP and the ACA. Now it seems all three legs of the coverage stool are at risk of being cut. The President’s budget assumes repeal of the ACA and likely an even lower cap on Medicaid as described above. Although the budget itself is very hard to follow, it seems that it contains an additional $616 billion in Medicaid and CHIP[1] cuts over and above the $840-$880 billion in the House passed bill for a massive reduction in Medicaid funding.

The proposed level of CHIP funding is also murky, but a two-year extension is contemplated and there is clearly a significant cut to funding given the budget assumptions and the policy changes indicated. The 23% “CHIP bump” in the match rate is eliminated, states won’t receive enhanced CHIP match (or possibly any match at all – it is not clear) to cover kids over 250% of the poverty line, and the maintenance-of-effort provision, which has ensured that states maintain their income eligibility levels for children is also eliminated. Twenty four states (including DC) cover children above 250% of the poverty line today so this limitation on state flexibility is a big deal. The budget would also allow states to move their “stairstep” kids (age 6-18 from 100-133% of the poverty line) back into separate state CHIP programs from Medicaid – a move which would likely imperil some kids’ coverage should premiums be reinstated at those income levels.

It’s worth noting that all of the additional state flexibility with respect to children’s coverage in the Trump budget amounts to new options to cut or limit coverage for children (i.e. eliminating the maintenance-of-effort, and moving “stairstep” kids back to separate CHIP plans where benefits can be more limited and premiums can be imposed). In fact, the Trump policies restrict state flexibility where states have chosen to cover more kids (i.e. those above 250% of the poverty line).

So while some might say “don’t worry this budget is reportedly dead on arrival”, I find this a deplorable and disheartening statement of what the President thinks our country should value. It is clear that children are not on that list.

[1] See Table S-2 accessed online at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/budget.pdf

Joan Alker
Joan Alker is the Executive Director of the Center for Children and Families

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