In March, the House approved a resolution that cuts $880 billion from Medicaid over a decade. The severity of the proposed reduction – unprecedented in Medicaid’s six-year history – will destroy the program. The elected leader will be in charge of discussions until September, and their actions will have dramatic results for my patients and the 74 million children in the country.
Medicaid is the backbone of pediatric health care. It covers about 40% of American children, or 35 million children, making it one of the biggest insurance companies for children. In Florida, it is almost 1.8 million children. It covers 19% of adults, in contrast to Medicare, which Congress has vowed to remain untouched.
Medicaid will provide access to primary care, hospitals, emergency rooms and prescription medications for low-income families. But it’s not just a safety net for poor children. Children with complex medical conditions, foster parents, and children with disabilities are also registered.
As a neonatologist, Medicaid is a lifeline for my patients. Approximately 40% of Florida births are insured by Medicaid. This program pays for an unbalanced number of very premature births. Those babies remain hospitalized for months under my care and owes a bill of hundreds of thousands of dollars.
Medicaid exists for all of us. I have cared for hundreds of middle-class and middle-class families with private insurance plans with annual spending caps. Once these limits are reached, the parent pays everything. If you are unlucky enough to have a very immature baby or have a child with cancer, you will surpass those spending limits in weeks for the specialist care of ventilation devices, customized intravenous fluids, MRI, and medical expertise associated with all its techniques. For every family, from police officers to nurses to lawyers, Medicaid saves them from losing their homes.
The sad truth is that wealthy families don’t think until Medicaid needs it either.
This program benefits all children, whether they are in Medicaid or not. Children’s Hospitals provide over 40% of pediatric inpatient care and 90% of pediatric cancer care. These are shared community resources. In most children’s hospitals, more than half of all patient care is paid by Medicaid. In my newborn unit, over 75% of babies use Medicaid.
However, Medicaid only covers about 80% of hospital costs. This means that the finances at local children’s hospitals are always unstable. These dramatic cuts, which lasted for a decade, force the closure of children’s hospitals. When they do so, the pediatric intensive care units, burn units and other services are gone for everyone.
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Medicaid refunds are economic miscalculation. Children are the highest value in healthcare, representing 20% of Medicaid costs, but accounting for around 50% of enrollees. This scale of reduction will distract children from primary care and create higher long-term costs. Children who deny asthma inhalers will likely be more expensive as emergency room patients next month. Currently, infants who cannot obtain speech therapy will cost more money in primary schools.
Medicaid is a wise investment.
The National Economic Research Bureau found that the federal government is paying 56 cents for every dollar spent on Medicaid for children. Nobel Prize winner James Heckman discovered that every dollar invested in a child produced a 13% return per year. Having Medicaid as a child translates to low-income children with fewer days of escape and lower high school graduation rates. However, these savings do not occur in the era of election cycles, so Medicaid’s economic benefits continue to be a blind spot for legislation.
These cuts are misguided in the story needed to reduce waste. Medicaid is a streamlined program with overhead costs of around 5%, and almost 20% for private insurance. Instead of focusing on Medicaid waste, Congress must have private insurance – more efficient for its endless denials, advance approvals, refusal hospitalizations and restrictive drug formulations. Also, since US doctors spend 50% more time on administrative tasks than doctors in other countries, it would free up more time for my patients.
The fight for the health of children extends beyond my hospital walls and into the halls of Congress. If our leader enacted these cuts, they will refund the pediatrician.
Medicaid works. The only thing that’s broken is an idea that needs to be fixed.
Shethal Shah, Maryland, is a neonatologist and former chairman of the National Council on Pediatric Policy.