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Latest Trump Budget Cuts Children’s Health Insurance Program

by Staff Contributor on May 25, 2017
Fast Money

Trump’s most recently divulged budget intends to cut Children’s Health Insurance Program by at 20% over the span of the next two fiscal years and drastically cut Medicaid, which covers millions of other children.

This proposed change means that millions of poor and working-class families are at risk of losing their health coverage if this budget—announced this Tuesday and named “A New Foundation for American Greatness”—is approved of as is. This would constitute a major hit to children’s health care and it would also concretely break Trump’s campaign promise to “save” Medicare “without cuts.”

Over the course of the next decade, the proposed budget would cut Medicaid by over $800 billion, which is roughly a fourth of what the health care program is speculated to spend on poor families.

Poor children are covered by a complex web of programs being that Medicaid covers roughly 37 million children and the Children’s Health Care Insurance Program (CHIP) covers about another 8.9 million. Together, according to the Kaiser Family Foundation, these two programs cover about a third of the children in the US.

Ironically, when Trump ran while advertising the promise to terminate Obamacare and improve the health care he would give people, he vowed to refrain from tampering with Medicaid “like every other Republican.” However, the Office of Management and Budget Director Mick Mulvaney revealed on Monday that Trump had personally approved each individual cut included in the proposal.

“I can tell you exactly how it went down,” Mulvaney stated. “I went into the President with a list of proposed entitlement reforms.

“He went down the list, yes, yes, no, no, yes, no, yes, no, no,” Mulvaney revealed. “The nos were all Social Security and Medicare. That is it. He said, ‘I promised people on the campaign trail I would not touch their retirement and I would not touch Medicare, and we don’t do it.'”

Mulvaney stressed that the largest savings in the budget arise as a result of getting rid of or scaling back entitlement programs.

The budget would also drop other programs that aid the working-class poor. For example, it cuts food stamps, student programs, the earned-income credit, the child tax credit and disability payments, and so on. On the other hand, these cuts are balanced out with an augmentation of military spending, border security and infrastructure.

When asked whether or not these cuts are “hard-hearted,” in regards to the cuts to an example he gave about an education program, Mulvaney replied, “You know, for the schoolteacher in Kenosha, Wisconsin, who is trying to raise two kids by herself, save for her college and save for their retirement, isn’t it hard-hearted to go to her and say, ‘give me money for a program that is only 6% effective’?”

Naturally, a presidential budget is never fully adopted by Congress. Both the House and Senate vote on budget proposals, and they typically vote on multiple versions of the proposal—indicating that it is modified consistently throughout the approval process.

CHIP, which runs on a combination of federal and state funds, was created in 1997. It works as a bit of a safety net for working families in these sense that well-child visits are free and, depending on the state, other benefits may be attained by the families for a small fee. All plans are required to offer prescriptions, immunizations, dental and vision care, X-rays, lab work, in- and outpatient hospital care and emergency services. However, if Trump’s proposed budget were to be approved, even with minor alterations, multiple services of those may have to be cut.

Upon its creation, states were given the option of expanding Medicaid to a more extensive group of children, in an effort to create their own separate CHIP program or to do a combination of both. In this case, individual states run the program, which is then referred to by different names, such as Wisconsin’s BadgerCare and Georgia’s PeachCare.

CHIP and Medicaid, in particular, have been deemed by outside evaluators to be effective and successful in providing the necessary care for children. The program aids children who would be otherwise incapable of attaining health care and decreases the financial burden and stress on families concerned about not being able financially provide for their child’s health care, according to experts in the field. Additionally, studies have shown that both programs diminish avoidable hospitalizations and child mortality, as well as improving the quality and uniformity of the care they are given. Improved health also appears to be correlated with higher grades, graduation rates and productivity, based on the results of related studies.

As of now, a record-high amount of children are covered by some form of health insurance.

CHIP additionally has a history of garnering strong bipartisan support. Republican Newt Gingrich’s Congress passed the legislation, and it was signed into law by a Democrat, President Bill Clinton. The program was co-sponsored by Republicans, including Senator Orrin Hatch and Senator Chuck Grassley, and was backed by Democrats such as Senator Ted Kennedy and Representative Bobby Rush.

However, it has not always received such undisputed support. Namely, President George W. Bush vetoed an expansion of the program. Furthermore, the current Health and Human Services secretary, Dr. Tom Price, voted against expanding CHIP during two different instances when he was in Congress.

The federal funding costs taxpayers roughly $15 billion per year. This budget has not been re-approved by Congress as of now. A congressional committee was scheduled to hold a meeting to discuss the matter in May, but it was brusquely canceled and has not yet been rescheduled. Meanwhile, the money for this program will run out September 30th.

The present CHIP “situation,” even prior to the announcement of the Trump budget, has irritated governors and other leaders who work with the program.

The National Governors Association addressed a letter to Congress in May insisting it allow a five-year extension on CHIP funding. It accentuated the importance of the program in claiming to be a “widely supported by governors, who recognize that access to health insurance is critical to ensuring a healthy start for our nation’s children.”

“Just over 95% of kids are covered. It is the highest it’s ever been, and we don’t want to take any steps back,” affirmed Lisa Shapiro, who is vice president of health policy with First Focus, a nonpartisan advocacy organization for children and family policy issues. “We are super disappointed with the whole situation surrounding CHIP. We don’t want to be playing with that success.”

The delay in funding has been a considerable issue for states. The majority of state legislatures have wrapped up for the year, and it’s difficult to plan programs when states are not sure of what the budgets will be.

Some states may be able to fund CHIP through 2018, independent of the situation with federal funds, according to the National Governors Association, but all states will eventually deplete their federal allotments in fiscal year 2018. This signifies that families could be getting letters as early as this summer informing them that they should make other arrangements for their child’s health care, if they are able to even afford other potential options.

“It’s not like a light switch that can turn on and off. States need time to plan and notify families,” Shapiro declared. “This creates a lot of uncertainty for the families who are enrolled.”

The Medicaid and CHIP Payment and Access Commission, a nonpartisan group selected by the US comptroller general that provides the Congress with advice, informed lawmakers that they should extend the budget for a longer amount of time. The commission proposed that the “urgency of congressional action to preserve health insurance coverage for the nation’s low- and moderate-income families cannot be overstated,” according to the letter penned by Chairwoman Sara Rosenbaum.

Maureen Hensley-Quinn, who is a senior program director with the National Academy for State Health Policy, explained that it has been working with states as early as last summer to be ready to handle any possible outcome as a result of what occurs in Congress. Some states have prepared dissimilar notification letters for families to rapidly adjust to whatever decision Congress reaches.

“No state—I feel really comfortable saying this—no state wants to dis-enroll kids. No state wants to freeze enrollment,” Hensley-Quinn stated. “They all are really hopeful Congress will pass extended CHIP funding.”

However, in the meantime, they have to ponder how to tangibly go about dealing with the matter through deciding what steps to take if federal funding for CHIP, Medicaid or the exchanges does shrink or dry up, Hensley-Quinn asserted.

“We know the support is there on both sides of the aisle, but with other concerns like this budget and the health care legislation, there is a bandwidth problem to work on this issue as well,” said Carrie Fitzgerald, who is the vice president of First Focus. She essentially believes Congress will continue to fund the program in spite of Trump’s proposed cuts. “We don’t want to slide backward and see fewer children covered and see fewer children get the health care they need.”

Featured Image via Wikimedia.

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Staff Contributor
Born and raised New Yorker with foreign parents; aftermaths include: having the tendency to switch languages mid-sentence, an endless stock of funny stories (normally founded on cultural/linguistic misunderstanding), a love of travel and reading, an excessive amount of curiosity (not nosy, just intrigued!), a sincere appreciation for food and coffee, and the ability to react to just about any situation with an infectious bout of laughter.
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