S. 114 is a model for how Congress should address the needs of uninsured children and children enrolled in Medicaid. If Congress were to focus on what children need, it would increase the federal investment in Medicaid coverage for them, not reduce it.

The bottom line is Medicaid matters to children of low income families, to children’s hospitals, and to all children. Medicaid pays for the health care of one in four children, one in three infants, and almost half of the patient care provided by children’s hospitals. When Medicaid is cut, it forces children’s hospitals to curtail services that benefit all children, not just low income children.

S. 114 directs additional federal funds to states to ensure they have the resources to cover the poorest children under Medicaid and the incentive to extend coverage to lower income children who are ineligible for Medicaid, but could qualify for the State Children’s Health Insurance Program (SCHIP).

S. 114 reflects the fact that children are not the cost drivers in Medicaid. Although they represent half of all Medicaid recipients, children, including children with disabilities, account for only 22 percent of Medicaid spending. Furthermore, per capita spending for children under Medicaid is comparable to private insurance costs, despite the fact that Medicaid covers a larger proportion of children with disabilities, who have more extensive health care needs. And for years children have led the modernization of Medicaid with their enrollment in commercial capitated managed care plans.

Currently, the biggest challenge to covering children under Medicaid is enrolling and retaining uninsured children who are eligible but not enrolled in Medicaid or SCHIP.

Two-thirds of all uninsured children are already eligible for one of these two programs but not enrolled. If resources were committed to fulfill the promise of Medicaid and SCHIP, virtually all children would be covered. There is strong, bipartisan support in Congress and the White House for doing a better job of enrollment.

The second biggest challenge is the growing inadequacy of Medicaid reimbursement to children’s providers. On average, Medicaid pays for physicians’ care for children well below Medicare reimbursement rates, despite the fact that Medicare rates are themselves widely recognized in Congress to be insufficient to ensure adequate access to care.

S. 114 addresses both problems. First, to ensure that states have adequate resources to give eligible children access to the care they need, the bill would authorize the federal government to give states sufficient funds to match or cover 100 percent of the recognized costs of care.

Second, the bill encourages states to extend SCHIP coverage to more children. If states were to raise eligibility levels for SCHIP to 300 percent of the federal poverty level, this would result in states’ receipt of a 100 percent federal Medicaid match for children with family incomes below the federal poverty level. The bill would also make several other changes in Medicaid and SCHIP, including giving states the ability to streamline and modernize their enrollment systems.

For these reasons children’s hospitals support S. 114. This bill aims high, striving to ensure all children receive health care coverage that meets their unique needs.

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Representing 130 children’s hospitals, the National Association of Children’s Hospitals addresses public policy issues affecting children’s hospitals’ missions of service to the children of their communities, including clinical care, education, research and advocacy.