Policy Resource

Statement for the Record for Senate Committee on Finance Hearing on “Graham-Cassidy-Heller-Johnson Proposal

Download Files Sep 25, 2017

By Matthew E. Melmed, Executive Director, ZERO TO THREE on September 25, 2017.

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Mr. Chairman, Ranking Member Wyden, and Members of the Committee, on behalf of ZERO TO THREE, I commend you for holding this hearing and affording us the opportunity to offer these comments on the Graham-Cassidy-Heller-Johnson (Graham-Cassidy) proposal, almost at the eleventh hour of a decision that will affect a large portion of the American people. We have grave concerns about this proposal’s consequences for the most vulnerable infants and toddlers in the United States. We believe it would be detrimental to their earliest health and development and urge the Senate to reject this attempt to radically restructure and constrict both the reach and quality of health insurance coverage for them, their families, and many other Americans. The start children get in the early years, as the foundations of brain development are laid, will determine the strength of our future workforce, economy, and national security. Founded 40 years ago, ZERO TO THREE is a nonprofit organization whose mission is to ensure that all babies have a strong start in life. We translate the science of early development for practitioners, parents, and policy makers. This science tells us that the domains of development—cognitive, social-emotional, and physical—are all inextricably interrelated. For infants and toddlers, health care practitioners not only assure their physical health, they also act as sentinels for problems with other aspects of development. Ninety-six percent of young children see a pediatrician or family medicine doctor; for very young children, this may be their only access point to an early childhood professional who can monitor their development.

Regular health care visits increase the chances of intervening early, when social-emotional and developmental problems are easier and less costly to address. This access is particularly important for infants and toddlers who face adverse childhood experiences as well as the two-fifths of all young children who experience economic hardship. These visits, made possible by robust health coverage, can detect and intervene to ameliorate the consequences of these damaging experiences. Left unaddressed, these problems can lead to developmental delays, lack of success in school, involvement in the juvenile justice system, life-long health, mental health, and substance abuse problems, and shorter lifespans.

Even though the CBO has yet to fully score the bill—a reason in and of itself not to bring the bill to a vote—it is clear that Graham-Cassidy would drastically reduce the number of Americans with health insurance. One only needs to look at the analyses of comparable proposals. Specifically, the impact of Graham-Cassidy’s per capita funding structure and reduction of federal funding would be devastating to the 37 million children covered by Medicaid. Ending Medicaid expansion and combining current subsidies for purchasing health insurance and other purposes into a time-limited block grant would further exacerbate the impacts. In contrast, I note the historic bipartisan advances over the past 50 years to secure coverage for children. Thanks to these efforts, the proportion of young children covered by health insurance is now greater than 96 percent. In states that expanded Medicaid, many low-income parents have health coverage where they could not afford it previously. While our current system has flaws that need to be fixed, clearly it has helped foster not just a culture of health, but family actions to improve wellbeing in the form of increased utilization of preventive care as well as mental health and substance abuse treatment that improves parental health and enables them to better nurture their children.

A fundamental question for this Committee, and the Congress as a whole, is this: how are America’s youngest children, their families and other adults, being helped by legislation that will retreat from these historic gains? Given the process through which this legislation is being ushered to a vote, we are concerned that Congress has not attempted to answer that question. This concern has only been amplified by the release last night of a new version of the proposal, for which no analysis from the Congressional Budget Office will be available before the deadline for the vote. While again we greatly appreciate this Committee’s action in holding this hearing, we are deeply concerned by the accelerated timeline and lack of transparency. To bring a bill with such wide-ranging impact to a vote without a full CBO score or sufficient hearings would fly in the face of the Congressional responsibility to act for the common good.

Many of the other comments you will receive today will detail the threats this legislation poses to the coverage and wellbeing of the country as a whole. My remarks will focus on the implications for infants, toddlers, and their families of restructuring Medicaid; eliminating Medicaid coverage for many parents and constricting other sources of coverage; allowing waivers of essential health benefits and pre-existing condition protections; and reducing the overall federal financial support for this basic need.

Restructuring and cutting Medicaid would endanger services to the most vulnerable babies and toddlers.

For families, affordable health insurance opens the door to the pediatrician’s office for the many routine visits recommended in the early years, as well as inevitable illness care. Medicaid has played that critical role for vulnerable young children, working in conjunction with the Children’s Health Insurance Program (CHIP) to cover 45% of children under age 6 and 74% of young children living in or near poverty. Medicaid covers almost half the births in the United States, serving as the key source of newborn care that gives almost 2 million babies a strong start in life each year. Young children in low-income families are at greater risk for developmental delays and experiencing adverse circumstances that lead to lifelong health problems. For them, the sentinel role of the health care practitioners they are able to access through Medicaid is particularly critical. The very robust Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) benefit serves to identify and address problems early, before they take root and become costly, chronic problems down the road.

Reducing Medicaid funding by as much as $175 billion over 10 years in non-expansion funding to states already facing their own budgetary constraints would have severe consequences. It could result in reductions in meeting the critical needs of young children through decisions such as restricting criteria for Medicaid eligibility; decreasing benefits and access to services, possibly including EPSDT; shifting the cost burden to patients; making enrollment more cumbersome for children; or decreasing access by cutting already below-market provider payment rates, creating a disincentive for providers to see Medicaid beneficiaries. (For more information, see our policy brief America’s Babies Need Affordable Health Care: The Impact of Medicaid Restructuring on Young Children.)

Infants and toddlers in foster care are a particularly vulnerable group. They comprise almost a third of all children coming into foster care. Abuse and neglect, combined with the myriad other problems their families typically face, drastically increase their risk for developmental problems and long-term health problems. Fifty-five percent of infants and toddlers with substantiated maltreatment have five or more risk factors, which together radically increase the incidence of developmental delays. Almost all children in foster care are covered by Medicaid, which makes their foster and adoptive placement feasible. EPSDT helps assure they receive the physical and mental health services they need and the developmental monitoring to detect and even prevent the problems for which they are most at risk. Children in foster care or in special needs adoptive placements have greater health needs and therefore higher health costs. Placing states in a position of having to tighten their health coverage budgets could mean reductions in coverage for this vulnerable population, fewer placements with family members, and fewer adoptions for children with special health care needs.

Eliminating Medicaid expansion, as well as constricting access to private insurance, would prevent parents from getting care that benefits themselves and their children.

Many adults—including many parents of young children—who could never afford coverage previously gained it through the Patient Protection and Affordable Care Act (ACA) and Medicaid expansion. This new-found ability resulted in an overall improvement in families’ wellbeing and created a culture of health in families where parents were able to get preventive and other care, making them better equipped to be caregivers to their children. They were more likely to get their children covered—states that expanded Medicaid for adults saw nearly twice the decline in child uninsured rates as non-expansion states. (For more information see our brief America’s Babies Need Affordable Health Care: What the repeal of the ACA means for babies and our future workforce.)

It is therefore particularly disheartening that Graham-Cassidy ends the ability to cover these adults after 2019, not even allowing states the option of covering them. It is doubtful states will have adequate funding to create a whole new program for these adults, especially since expansion states actually will lose money under this bill, only to see it flow to states that ignored the needs of low-income adults. Because the ACA expansion funds were open to all states, arguments that this funding reallocation creates parity among states seem specious.

In light of the current national alarm over the opioid epidemic, including here in Congress, I want to underscore that eliminating Medicaid expansion would severely limit access to mental health and substance abuse treatment, which greatly increased in those states that adopted the expansion. Nearly 30% of people who became covered under expansion had a mental disorder or a substance use disorder. Research indicates that this coverage improved access to behavioral health treatment. Such access in turn benefits children, whose development is greatly affected by their parents’ mental health and general wellbeing. Substance abuse, including the most recent crisis involving opioid abuse, affects many families involved in the child welfare system, including more than 80% of the infant-toddler cases in ZERO TO THREE’s Safe Babies Court Teams project. Removing an avenue to substance abuse and mental health treatment would be a cruel stroke for these families.

Allowing states to waive essential benefits jeopardizes the health of young children and their parents.

Another troubling aspect of the bill is the ability of states to obtain waivers for Essential Health Benefits (EHBs) as well as the rates people with pre-existing conditions are charged. Among those EHBs that can be waived are services such as maternity and newborn care, pediatric care, and mental health treatment. What are the implications of treating these fairly basic needs as special services?

Maternity and Newborn Care: It is truly astounding that in the United States, which still has one of the highest infant mortality rates among developed nations even with recent declines, maternity and newborn care could be treated as an unusual specialized service that could be very expensive to obtain. If states do not require all plans to cover maternity care, fewer women will be able to afford coverage, resulting in fewer healthy babies. Prior to the ACA, 62% of plans in the individual market did not cover maternity care. Children’s and mothers’ access to health insurance during pregnancy and in the first months of life is linked to significant reductions in infant mortality, childhood deaths, and the incidence of low birth weight, which itself can contribute to developmental problems. In addition, states could drop the requirement that insurance cover breast pumps for nursing mothers, as well as the protection of requiring employers to protect breastfeeding mothers’ ability to pump at work, enabling babies to benefit longer.

This importance of these outcomes should not be minimized: Again, among the most developed nations, the United States has one of the highest infant mortality rates (right between Serbia and Bosnia/Herzegovina), 5.8 per 1,000 births compared with, for example, Japan at 2.0, South Korea at 3.0, and the European Union at 4.0. A function of available health care and in particular a high rate of preterm births, this rate ought to be a national embarrassment. Yet, if it has been mentioned in the current health-care debate as maybe a reason to protect Medicaid as well as prenatal care benefits in private plans, I haven’t noticed.

Pediatric Care: As a parent, it is hard to imagine either an area of care that is more essential or what would lead someone to conclude otherwise. The first reason is obvious: Good health is critical for growth and development. Regular health care monitors how babies are growing and thriving, provides developmental screening, ensures they keep up with immunizations that protect them from disease, and treats them when they are ill. During their first 5 years, children should have 14 well-child visits, half before they turn 1. Uninsured young children are much less likely to see a doctor for preventive care (68% compared with 92% of insured children). Preventive services also drastically bend the cost curve through prevention or early identification of costly illnesses, saving money down the road. As I noted earlier, particularly for vulnerable children, pediatricians and other primary care providers for young children are literally the sentinels for developmental problems and contributing environmental factors.

Mental Health Care: Parents’ mental health is a critical part of their overall health and wellbeing. In turn, it affects their ability to parent. Because infants and young children develop in the context of close, consistent relationships, their own emotional wellbeing is directly tied to the emotional functioning of their caregivers and families. Untreated parental depression, substance abuse, intimate partner violence, and trauma disrupt parenting and can affect the mental health of children. Infants and young children also can experience emotional or behavioral disturbance. Symptoms of depression and anxiety, post-traumatic stress disorder, attention-deficit/hyperactivity disorder, and other mental health issues can begin to manifest in infancy and toddlerhood. Undiagnosed or untreated mental health disorders can have serious consequences for early learning, social competence, and lifelong health.

Capping Lifetime and/or Annual Benefits: Because the ACA’s prohibition of lifetime or annual caps on benefits applies only to EHBs, waiving categories of care could drastically affect the ability of children with costly conditions to get necessary care throughout their lives. Babies born with severe congenital problems may need costly initial and ongoing treatment. Opening the possibility of capping annual and/or lifetime benefits could mean they reach their cap very early in life, leaving them vulnerable to being unable to afford lifesaving care later.

Preexisting Conditions: The ability of states to allow insurance providers to charge higher rates for people with preexisting conditions, without a definition of what is “affordable and adequate coverage,” is another component of this bill that could haunt young children with health conditions throughout their lives. Families could face tough choices if 17 million children under age 18 with pre-existing conditions are no longer guaranteed affordable
health coverage from their private insurance
companies. Families with children with
conditions such as asthma, diabetes, autism,
and birth defects—all of which lead to
chronic health care needs—may in effect lose
insurance coverage, be locked into unsatisfactory plans, or be subject to lifetime or yearly caps. Of course, which state you live in will make all the difference, so that families in one state may be secure while those in another could end up with spiraling costs for preexisting conditions—precisely the kind of geographic inequity the ACA sought to eliminate.

States will be forced to make wrenching choices.

While no CBO score is available, health insurance experts estimate that states will lose as much as $489 billion by 2027 and a staggering $4.15 trillion by 2036 should this bill become law. The consequences for both people who need health insurance and for other programs in state budgets could be profound.

Taking so much money from the system and capping and cutting the amount available to states will affect the level and quality of services offered. Restructuring Medicaid would put pressure on the ability to provide key benefits such as EPSDT and other protections for children most vulnerable to developmental and health issues. There could be decreased opportunities for Medicaid innovation with less costly populations, including young children. The unprecedented financial pressure of both restructuring Medicaid and block granting basic health coverage responsibilities combined with drastically cut federal funding, makes it all the more likely that states will feel forced to pursue waivers to cut costs. And these waivers will be easy to obtain.

This pressure is made almost unbearable by the fact that the ACA replacement block grant is only funded for ten years. To create such uncertainty about a critical human need for states, health insurance markets, and the people who look to them for health coverage is unconscionable. We have only to look at the uncertainty around continuation of the Cost Sharing Reduction payments and the ACA itself, or at the nine million children currently in limbo as CHIP expires this Friday, to see the anxiety such a time-limited authorization creates.

Other children’s programs in state budgets could be pressured as well. States have to absorb the need to compensate for federal cuts somewhere. Programs such as child care, education, family supports or other services critical to children, already stretched thin, could be eroded further. Services to children in foster care or those needing early intervention for developmental delays or disabilities could be curtailed.

Costs don’t go away when a child loses insurance but must have care. An uninsured child costs the local community $2,100 more than a child insured by Medicaid. Moreover, unaddressed issues such as developmental delays or disabilities could lead to higher costs in other systems, such as special education.

Families could face decreased economic security and increased long-term health care costs.

Many of the families that benefit from the ACA, and all of those benefitting from Medicaid expansion, are low-income. Insurance on the private market will likely be out of reach for them. High premiums and out-of-pocket costs or loss of Medicaid or other health insurance altogether will financially strain already stressed families, forcing them to go without health care or cut other essentials for meeting basic needs. Drastic restructuring of our health insurance system could have far-reaching consequences affecting our efforts to reduce poverty and increase the overall wellbeing and productivity of our people. For example, increased understanding of the role that social determinants of health play in health care costs has led some state Medicaid agencies to allow funds to be used to connect families with critical social services to address issues like housing and food insecurity. With mounting fiscal pressure, these important care coordination and case management services may no longer be a priority.

Conclusion

In focusing on the importance of health coverage for babies and toddlers, I have presented only one perspective on the immense impacts this proposal would have. There are many others, and together they should raise an enormous caution flag for the Congress. They are a signal of the critical need to consider how these decisions would affect the health of our people as well as other aspects of our overall economy and national security, effects that should not be obscured by the immediate goal of cutting federal involvement in this vital area. The infants and toddlers who today may lose care that could ensure their development stays on track, or whose parents may have nowhere to turn for mental health treatment, will be the workers, soldiers, and innovators who will be the backbone of our economy and national defense in a few decades. I urge the Members of the Committee and the Senate as a whole to reject this legislation that would undermine these young children’s future and our own. Unquestionably, there are many ways in which health insurance and health care itself could be improved. We urge you to undertake bipartisan efforts to move our health insurance system forward and focus on innovations to improve care and bend the cost curve in ways that make our people healthier.


References

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