Medicaid and the Financing of Pediatric Healthcare: Strengths and Opportunities.

Medicaid provides health insurance coverage for nearly half of all US children, offering broad service coverage for low-income individuals with minimal waiting periods and copays. The Children's Health Insurance Program (CHIP) insures children from households with incomes above Medicaid thresholds, but with less comprehensive benefits. Both Medicaid and CHIP typically reimburse at about 70% of Medicare payment rates. Unlike Medicare, which has full federal funding, Medicaid is a federal-state partnership. States receive 50% to 77% of their total Medicaid budgets from federal sources but retain administrative flexibility that results in widespread variation in eligibility and payments. The Medicaid Early and Periodic Screening, Diagnosis, and Treatment statute limits state variation in benefits by requiring states to cover screenings and all medically necessary coverable services for youth up to age 21 years, even if unavailable to older adults. Beyond facilitating healthcare access, Medicaid and CHIP have demonstrated substantial benefits in improving long-term health outcomes, increasing adult earnings, reducing public costs, and promoting health equity. With its many successes, Medicaid could serve as the base for a national health program available to all children. A more comprehensive national child health program should establish uniform enrollment and eligibility with adequate financing at least to match Medicare payment levels. Universal enrollment at birth would be standard, allowing families to opt out if they prefer commercial insurance. Payment should incentivize prevention, health promotion, and outcomes, with benefits grounded in EPSDT standards. The federal government or states could pilot innovative payment and care delivery approaches to enhance child health outcomes nationwide.