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CCHA Opposes American Health Care Act

Federal Legislation Passed by House Would Harm Children

On May 4, 2017, the House of Representatives voted on legislation, called the American Health Care Act (AHCA). CCHA opposes the AHCA, because it puts health care for California children at risk. The AHCA is harmful to children in two ways.

First, it caps federal funding for Medi-Cal, California’s Medicaid Program.  Because California has more people living in poverty than any other state in the nation, over half of California’s children — nearly six million of them – receive health care through Medi-Cal.  An estimated 9 percent of these children are disabled or suffer from chronic health conditions.  The federal cap included in the AHCA will create a growing funding shortfall that will hit California particularly hard, because California already has a very efficient program, with per capita costs that are already some of the lowest in the country and provider reimbursement rates that are significantly below cost.

Rather than rewarding California’s efficiency, the AHCA would penalize the state by locking in federal funding at this below-average level and capping it in future years.  Medi-Cal cannot sustain significant and growing federal funding shortfalls without cuts either to eligibility or benefits.   Either would put children’s access to medical care at risk.  California’s children could be further harmed in the event of an epidemic, natural disaster, or other unforeseen event that cannot be reflected under the cap.

Research indicates that Medicaid is a smart investment that pays lifelong dividends for children, families, and taxpayers.  National studies indicate that Medicaid coverage reduces infant mortality and morbidity.  Moreover, research shows that children with coverage through the program are less likely to miss school, are healthier into adulthood, earn more in wages and pay more in taxes over the course of their lives than children without health care coverage.  By capping federal support for this worthwhile investment in health care for children, the AHCA puts these gains at risk.

Second, the AHCA would enable states to waive consumer protections that are included in the federal Affordable Care Act.  Specifically, under these waivers, insurers could charge individuals with pre-existing conditions significantly more than people who are healthy and sell insurance that does not cover important benefits, like maternity care or prescription drugs.  While the AHCA also includes funding for high risk pools that are designed to reduce the impact that these waivers will have on consumers, California once operated a high-risk pool and the evidence from that experience is clear:  high risk pools are expensive, inefficient, and offer minimal benefits, including long waiting periods and annual and lifetime benefit caps.  High risk pools are completely inadequate to meet the health care needs of people with pre-existing conditions, like cancer and congenital heart conditions.  These waivers have the potential to limit access to needed health care to children with pre-existing conditions, including the hundreds of thousands of California children with special health care needs.