How Medicaid Cuts Could Impact Early Intervention for Young Children

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The first warning sign Rebecca Amidon spotted was when her 1-year-old daughter wasn’t walking on her feet. “She would only walk on her knees, and her coordination seemed really off,” Amidon recounted. Then physical therapists noticed tremors, a sign of a neurological condition that affects balance and coordination. Medicaid covered a brain MRI, which led to a proper diagnosis as well as orthotic ankle braces and weekly physical therapy appointments at the local hospital to support her development. 

“Medicaid is there to catch us all when we fall,” said Amidon, who lives in Manistee, Michigan. “It’s not just for people who’ve always needed it; it’s for people like my family as well, who never thought that we would be in a position to rely on it. Without Medicaid and these early intervention services, our family would be facing a much different reality.”

As plans for cutting hundreds of billions of dollars in Medicaid take shape in Congress and President Donald Trump’s proposed budget, parents and child health advocates are warning about collateral damage. Namely, the healthy development of young American children.

Nationwide, 31 million children rely on Medicaid, and experts such as Julie Kashen, senior fellow and director for women’s economic justice at The Century Foundation, have sounded the alarm, saying, “Reductions in coverage could worsen the health of those children and their communities.” 

While Congressional debate is largely focused on cutting coverage for low-income adults and limiting states’ ability to raise taxes for healthcare spending, the impact could well cause children to lose services and access to health care. 

“There’s not a lot of fat to cut in Medicaid,” Elisabeth Wright Burak, senior fellow at the Georgetown University Center for Children and Families said on a recent webinar. “Cuts would put states in a very difficult position of making hard decisions between spending more or rolling back existing coverage or services.” 

Medicaid, a state-federal partnership, supports American families in many different ways. The health coverage it provides to low-income children has been shown to improve health and boost educational attainment. Nearly three in 10 child care workers are covered by Medicaid, and it is a major funder of community health workers. 

Medicaid also helps fund part C of the Individuals with Disabilities Education Act (IDEA), which provides early intervention screening and services. Established by Congress in 2004, the program is designed “to enhance the development of infants and toddlers with disabilities, to minimize their potential for developmental delay and to recognize the significant brain development that occurs during a child’s first three years of life.” The program provides early intervention screening and services with resources that vary by state.

Nationwide, about 540,000 children under age 3 receive Part C services, and about half of them are enrolled in Medicaid, according to a report from the Infant and Toddler Coordinators Association. Part C saves taxpayers money by minimizing long-term costs for children with disabilities, promoting school readiness and reducing the prevalence of severe disabilities in adulthood. These benefits have been extensively documented:

• These services are proven to support outcomes for infants and toddlers with developmental delays.
• As a result of early intervention services, 42% of young children served did not need special education by the time they reached kindergarten.
• Infants and toddlers with disabilities who receive services under Part C demonstrate improved social-emotional skills, knowledge and behaviors — with two-thirds substantially improving and about one half catching up to a level appropriate for their age.

Every state has different Medicaid policies and protocols, which can limit the support that children receive. In Texas, 75% of the state’s Medicaid enrollees are children, said Adriana D. Kohler, policy director of Texans Care for Children, a children’s advocacy nonprofit. About 2.8% of the state’s children under age 3 receive Part C services compared to 7% nationwide, the latest data show “It’s pretty complicated for the early intervention providers,” Kohler said. “We leverage over a dozen different funding sources, and Medicaid is a critical source of funding.”

Owing to drastic cuts in Medicaid that Texas lawmakers enacted in 2011, the number of early intervention providers dropped from 58 to 40, while enrollment in the Part C program dropped by 20% to 30% in some areas, according to Kohler. “You had to be a more severe case or have higher needs in order to qualify,”  she said. “These programs are having to do more with less.” 

Texas is also one of 10 states that has not agreed to the Medicaid expansion approved in the Affordable Care Act, meaning that uninsured adults living under the poverty line cannot access Medicaid unless they are pregnant, gave birth in the past year, have a disability or live in a nursing home. 

Burak underscored the particular risks for children’s health care in states that did not expand Medicaid and rely on taxing managed care organizations to pay for services. A proposal now before Congress would prohibit such provider taxes, meaning states like Texas would likely be forced to cut back on coverage or services for kids.

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