Medicaid Reform: Key Considerations for Children's Health Care

Eileen K. Fry-Bowers, PhD, JD, RN, CPNP; Karen G. Duderstadt, PhD, RN, CPNP, FAAN


J Pediatr Health Care. 2017;31(4):517-519. 

In This Article

Abstract and Introduction


Medicaid is the largest provider of public health insurance for children and adults in the United States and provides critical financial support for the nation's safety net of clinics, hospitals, and long-term care facilities serving the poor and uninsured. Medicaid is a federal entitlement program that is administered by the states and funded through state and federal partnerships (Turner, McKee, Chen, & Coursolle, 2017). Under current federal regulations, all states must provide Medicaid coverage for children under 6 years of age with family income up to 133% of federal poverty level (FPL) and children ages 6 to 18 years with family income at or less than 100% of FPL (Kaiser Family Foundation, 2013). Children whose family incomes are between 100% and 200% of FPL are eligible for health care coverage through either Medicaid or the state Children's Health Insurance Plan (i.e., CHIP). Under the Affordable Care Act (ACA; Patient Protection and Affordable Care Act, 2010), 31 states expanded Medicaid and raised the mandatory financial eligibility standard for children ages 8 through 18 years from 100% to 133% of FPL.1

Federal funding for state Medicaid programs is determined by the Federal Medical Assistance Percentage (FMAP) formula (Kaiser Family Foundation, 2012). The FMAP formula is based on state per capita income. States with lower per capita income have higher FMAPs and, therefore, receive a larger portion of federal funds. State FMAPs vary from 50% to 74%. For example, Mississippi has the highest FMAP at 74%, which translates into Mississippi receiving $0.74 of federal money for every Medicaid dollar spent. In comparison, Minnesota is one of 15 states with a FMAP of 50% and therefore equally shares funding of Medicaid with the federal government.

As required by federal law, Medicaid has a mandatory benefits package in all states that includes coverage for hospitalization, physician or nurse practitioner services, laboratory and radiology services, and transportation for all Medicaid beneficiaries (Turner et al., 2017). States are further required to provide persons under 21 years of age with Early and Periodic Screening, Diagnostic, and Treatment services that include more robust services than Medicaid including vision, hearing, and preventive dental services. The mandate of Early and Periodic Screening, Diagnostic, and Treatment services to screen, diagnose, and treat children living in low-income families has improved health outcomes for generations of children.

1The language of ACA specifies that childless adults are Medicaid-eligible with modified adjusted gross income at or below 133% FPL. ACA's modified adjusted gross income calculation is based on adjusted gross income as defined in the Internal Revenue Code, §36B(d)(2). However, §2002(a)(14)(I)(i) of ACA adds a 5-percentage point deduction from the FPL, resulting in an actual Medicaid eligibility threshold of 138% FPL.