KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Recession And Budget Cuts Hit Children Especially Hard

As the recession forces more hospitals and doctors to pare costs and services, children are being especially hard hit.

The Wall Street Journal reports: "The economic slump is hitting many medical centers and practices in a variety of ways. Credit remains tough to come by, revenue is down as some patients forgo care, and the number of uninsured is ticking higher as more people lose their jobs. On top of that, some two dozen states around the country have enacted or proposed steep cuts to Medicaid payments because of severe fiscal crunches. Children's hospitals and pediatricians are among the hardest hit by state cuts. That's because, while children have always made up about half of Medicaid's rolls, their numbers have swelled in recent years to the point that at least 22 million, or one in four, U.S. kids now get their health coverage through Medicaid or a state Children's Health Insurance Program. States often administer CHIP, which is aimed at families with more income than Medicaid participants, as part of their Medicaid programs. Both Medicaid and CHIP are jointly funded by state and federal governments."

The Wall Street Journal notes that "it''s becoming increasingly difficult to find a doctor, particularly a specialist, who takes Medicaid. In a recent survey by the Medical Group Management Association, a trade group, 18% of 1,850 practices polled said they no longer took new Medicaid patients, while an additional 11% said they were likely to stop in response to the recession." Cuts in Medicaid also "affect services for privately insured kids, as children's hospitals cut staff and programs to make up the revenue shortfalls."

Meanwhile, states are cutting back on other programs that affect children. "In a recent survey by the National Association of Children's Hospitals, about 20% of the 42 hospitals responding reported they had cut or were considering reducing clinical services because of the downturn." The Wall Street Journal notes: "State cutbacks come even though Congress in February approved $87 billion in additional Medicaid funds to states as part of the economic stimulus package. Medicaid, with a total budget last year of about $330 billion, swallows about 7% of the federal budget and constitutes one of the biggest chunks of state budgets. Congress also appropriated $33 billion to expand CHIP coverage" (6/17, Fuhrmans).
