Proposed Medicaid cuts could impact coverage for 400,000 Arkansas children

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Julie Kauffman with her daughter, Olive

 

On Thursday, Republicans in the U.S. Senate introduced a long-awaited bill to replace the Affordable Care Act, the health care law often referred to as Obamacare. The Better Care Reconciliation Act would rework the ACA’s subsidies for individual insurance policies, cut taxes for higher-income households, end the mandate that individuals have insurance, and allow states to opt out of ACA requirements that insurance policies include benefits such as mental health and maternity coverage. It would also put an end to the enhanced funding rate that made it possible to expand Medicaid to cover some 14.4 million low-income adults nationwide.

But the Senate bill, like similar legislation passed by the U.S. House of Representatives in May, would also institute major cuts to the traditional Medicaid program, potentially affecting coverage for millions of children, elderly people and disabled adults nationwide. In Arkansas, 30 percent of the state’s population — about 912,000 people — were enrolled in some form of Medicaid in March 2017, according to data from the Centers for Medicare & Medicaid Services. That figure includes enrollment in the Children’s Health Insurance Program, or CHIP, which together with Medicaid pays for ARKids A and B.

Marquita Little, health policy director at Arkansas Advocates for Children and Families, said the Senate bill “goes well beyond the political promise of repealing Obamacare. It restructures Medicaid funding. And so, it really is a U-turn on the promise that the federal government has always made to states — that Medicaid would be funded through a state-federal partnership.” (Arkansas Advocates for Children and Families has contributed funding to the Arkansas Nonprofit News Network.)

The Senate bill would reshape Medicaid in two ways. First, beginning in 2021, it would phase out the Medicaid expansion created by the ACA, which provides coverage to low-income adults. Approximately 300,000 Arkansans are now enrolled in Arkansas Works, the program funded by the Medicaid expansion. Second, the Senate bill would cap federal spending on the rest of Medicaid, which existed long before the ACA’s expansion and which is composed of programs such as ARKids. Rather than Medicaid paying for patients’ medical care on an open-ended basis, as is now the case, the federal government would disburse funds to states in lump sums, either on a per capita basis or through block grants. Next week, the Congressional Budget Office is expected to release projections on the cost to Medicaid should the Senate bill become law.

Parents like Julie Kauffman of Mountain Home are anxiously watching developments in Washington and wondering how the proposed cuts would translate to Arkansas. Kauffman’s daughter, Olive, suffers from cerebral palsy that resulted from viral encephalitis that developed 12 days after she was born. After the infant was airlifted to Arkansas Children’s Hospital, Kauffman and her husband were told their private Blue Cross policy would pay for less than half of the helicopter ride, leaving them on the hook for $7,000.

“That was kind of our first introduction to, ‘Oh, our health insurance doesn’t cover what our child needs,’ ” Kauffman said. The financial office at the hospital told the parents they should get Olive on Medicaid. “I thought, ‘We have health insurance, this is ridiculous. We don’t need Medicaid.’ Two helicopter rides later, and thousands and thousands and thousands of dollars later, we desperately need Medicaid.”

Now 3 years old, Olive’s condition requires periodic visits to specialists at the Cerebral Palsy Center at St. Louis Children’s Hospital, plus regular speech, occupational and physical therapy sessions at a clinic in Mountain Home. She now spends nine hours in therapy per week. “What Blue Cross covers for her and therapy, she maxes out every year in February. That’s when Medicaid picks up the rest of her tally,” Kauffman said.

It’s especially crucial that Olive receive intensive therapy at a young age, Kauffman explained, to maximize her chances of developing the skills necessary to lead a more independent life. “It’s now or never. I mean, we have to do it now. She’s 30 pounds. She doesn’t have head control. She can’t sit up and feed herself. She’s nonverbal. She’s, you know, total care, and unless we get as much bang for our buck now, what does her future look like?” On July 1, a new rule from the Arkansas Department of Human Services, which administers Medicaid in Arkansas, will limit the number of billable minutes of speech, occupational and physical therapy a beneficiary may receive each week without special authorization. The cap is 90 minutes for each category — about half what Olive receives right now. DHS said in a September legal notice that the change is estimated to save the Arkansas Medicaid budget $56.2 million annually. Kauffman said she will seek DHS approval to keep paying for the additional therapy hours, but she’s concerned about the future.

“What’s happening in the state alone, along with what’s coming down from the federal level — it’s just terrifying.”

Kauffman said her biggest concerns about the Senate bill “are the cuts and the block grants. If it comes down to a block grant system where the federal government gives each state a set amount of dollars, how is that going to be disbursed from child to child? I don’t know how they would even begin to figure that out. My kid is expensive, and that’s not her fault. … I understand the thought process that Medicaid cannot sustain at the rate that it’s going. But there are also a lot of kids in my daughter’s situation who didn’t ask for this. They need as much help as they can possibly get, and in a perfect world her private insurance would cover what she needs — but it just doesn’t.”

Olive previously was on ARKids but now has Medicaid coverage through Supplemental Security Income (SSI) Disability. “Because my husband and I are both self-employed and our income fluctuates, she qualifies for SSI at the moment — but that could change at any moment,” Kauffman said. She is a subcontractor for a medical billing company; her husband owns a furniture company, where she also works part time. Although their daughter receives substantial government benefits, the couple also ends up devoting much of their household income to her care as well, from specialized equipment to travel costs to St. Louis to therapy that must be paid for out-of-pocket. For the self-employed, time away from home is time spent not working — an additional drain on family resources.

“We’re fortunate to have grandparents who chip in when they can and relatives who help out as needed, but, for the most part, we’re just doing the best we can do to get by,” she said. “We could have $10 million and it still wouldn’t be enough.”

Approximately 400,000 kids in Arkansas are on Medicaid — about half the children in the state. Only a small percentage have medical needs as pronounced as Olive’s. Nonetheless, Marquita Little said, reductions to federal Medicaid spending proposed by the Senate bill would be “devastating to our medical system in Arkansas.

“Our overall impression is that it’s still a dangerous bill for kids, for our most vulnerable populations … [including] seniors, people with disabilities. By capping funding on traditional Medicaid, we would basically be reducing funding that we have in place for those populations. ... So what that means for Arkansas is that we would be forced to make some tough decisions about how we absorb those cuts. You either have to reduce what you actually cover, or you have to reduce payments that we’re making to providers.”

Having a child who requires such specialized care has changed her perception of Medicaid and those who benefit from the program, Kauffman said. “The biggest thing is that Medicaid helps so many more people than just what everybody assumes… . You know, people who don’t want to go out and find a job and take care of themselves. Medicaid is so much more than that. So I think it’s just this misconception … and I was guilty of that. But now I know how needed it is.”

This reporting is courtesy of the Arkansas Nonprofit News Network, an independent, nonpartisan news project dedicated to producing journalism that matters to Arkansans.

Julie Kauffman with her daughter, Olive

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