Point of View

A Medicaid change to block

October 14, 2011 

— Medicaid is enormously successful at improving the lives of North Carolina's children. Close to 1 million of the state's 2.3 million children are covered by this public health insurance program.

Thanks to Medicaid, more North Carolina children are covered by health insurance today than ever before, which helps all of us: The evidence is clear that children with health insurance are healthier, do better in school and save the state money going forward.

Covering children under Medicaid is a great deal for North Carolina. Children are inexpensive to cover - nationally, they account for nearly half of Medicaid beneficiaries but only 20 percent of Medicaid spending - and the federal government picks up most of the cost. During economic downturns, when more children need coverage because their parents get laid off, federal help automatically increases to meet the need.

A proposal being debated in Congress would change the way Medicaid is funded. Rather than allowing funding to fluctuate with need, the proposed block grant scheme would pay North Carolina a set amount each year, regardless of how many children - and others - need coverage.

This block grant scheme - while it would save the federal government money in the short run - would increase costs in the long run, put more pressure on the state budget at a time when we can least afford it, harm North Carolina's children and jeopardize the future quality of North Carolina's workforce:

Block grants would mean more uninsured children and higher costs down the road. North Carolina could be forced to freeze enrollment for children or drop coverage. Because children use mostly preventive health care and are inexpensive to cover, limiting children's enrollment in Medicaid won't save the state much even in the short run and will drastically increase costs in the long run as uninsured children grow sicker and require more emergency and chronic health care.

Block grants mean more pressure on the state budget. The current state budget woes have already resulted in cuts to Medicaid services for the most vulnerable North Carolinians - the elderly, the poor and the disabled. The block grant scheme would mean fewer federal dollars flowing to North Carolina, which would mean more pressure on our state budget and still more drastic cuts in Medicaid benefits.

Block grants would harm children's health outcomes. So far, children have been held relatively harmless in the state Medicaid budget cuts because of minimum federal requirements for children's coverage, which include early screenings, vaccinations, preventive check-ups, hospital care, chronic disease management and vision and dental care. Under the block grant scheme, however, there would be no federal minimum requirements for children's care, meaning North Carolina might have to eliminate these critical services that keep our children healthy.

Block grant would mean fewer doctors for Medicaid-enrolled children. North Carolina would have to lower the reimbursement rates paid to pediatricians, pediatric dentists and pediatric specialists still farther. As rates fall, more and more pediatricians will no longer be able to afford to take Medicaid patients, and children - especially in the rural areas - will no longer have a doctor to visit. Health insurance isn't very helpful if you can't get to a doctor.

Medicaid is a great deal. We need to urge our members of Congress not to make a short-sighted decision that will increase North Carolina's costs and harm our children. We need to remind them that North Carolina needs a strong work force going forward, and that means we need healthy children today.

Mandy Ableidinger is director of policy and budget analysis at Action for Children North Carolina. That agency is a partner of First Focus, a national child advocacy organization whose recent report "Medicaid Block Grants are Bad for Kids" can be accessed online at www.firstfocus.net.

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