Ryan's Plan CHIP-ing Away at Children's Coverage

House Budget Committee Chairman Paul Ryan’s Federal Fiscal Year 2012 budget blueprint, dubiously titled The Path to Prosperity, has damaging implications for children’s health. The Republican budget plan would dramatically cut funding for Medicaid and the Children’s Health Insurance Program (CHIP), health insurance programs that cover about 30 million children—almost a third of all children living in our country today.

Chairman Ryan would cut Medicaid and CHIP by a staggering $2 trillion over the next 10 years by doing the following:

1. Slashing the Medicaid Budget: Ryan’s proposal would cut $771 billion in federal spending from the Medicaid program. According to the Congressional Budget Office, "federal spending for Medicaid would be 35 percent lower in 2022 and 49 percent lower in 2030 than currently projected."
2. Transforming Medicaid into a Block Grant: Under a block grant, states that use up their federal Medicaid allotment will no longer be able to receive additional federal funds when costs go up or enrollment increases. Cash-strapped states will be left high and dry, and will have to make up the difference by raising taxes, cutting other spending, or shrinking their Medicaid programs.
3. Repealing the Affordable Care Act: Ryan’s blueprint repeals most of the new health law’s major provisions, including its language extending CHIP through 2019 and fully funding the program through 2015. This means that CHIP would not receive any federal funding past 2013, its reauthorization date prior to the Affordable Care Act’s (ACA) two-year funding extension. Repealing the ACA would also cut an additional $627 billion from Medicaid—bringing total Medicaid cuts to $1.4 trillion—and would have a host of other detrimental effects on children’s access to quality health care.

States will have to fill in these funding gaps somehow, which could mean cutting reimbursement rates to providers and hospitals, limiting benefits, or reducing eligibility levels. No matter how states work to fill in these gaps, children are likely to lose out. Children represent half of all Medicaid enrollees, but account for only 20 percent of Medicaid spending—meaning that huge numbers of children could be adversely affected by program cuts yet save the federal government comparatively little money.

The impact of limiting benefits is particularly concerning for children. As Jocelyn Guyer from the Georgetown Center for Children and Families points out in a recent Say Ahhh! blog post, families rely on these programs “for hearing tests and glasses so their children can grow and learn, as well as for physicals so they can play sports. In many families, Medicaid provides children with the medical care that they need so they can thrive in the face of common medical conditions such as asthma and ADHD.”

While Ryan’s budget proposal may be a path to prosperity if you’re a wealthy individual or corporation in line to receive some $1.8 trillion in tax cuts, it certainly isn’t a path to prosperity if you’re a family who depends on Medicaid or CHIP for your child’s asthma medications, eye tests, or flu shots. Our nation cannot afford to ignore the needs of its children. We can and should do better.

—Maia Fedyszyn, Program Associate, New England Alliance for Children’s Health