Medicaid’s Anniversary: Commemorating 50 Years of the Health Care Safety Net

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By John Schlitt, President, School-Based Health Alliance

Can it really be 50 years, Medicaid? You’ve held up remarkably well these past five decades! The landmark federal-state partnership, launched in 1965, has been a dominant force in the war on poverty and critical lifeline for millions of low-income and under-served families. With its financing covering nearly 40% of children and 50% of all births in the U.S., Medicaid’s growth—and importance—shows no signs of weakening.

Curiously, it was an early failure of Medicaid that gave rise to school-based health centers (SBHCs). Medicaid’s benefits were slow to trickle down to low-income adolescents. Welfare medicine—as Medicaid was initially derided—was linked to cash assistance, and available to only the poorest of the poor. For example, in 1997, Medicaid eligibility cut-off for a teenager in Texas was 17% of the federal poverty line (that’s $2,728 for a family of four in 1997 dollars). Lacking meaningful coverage and access, adolescents were considered one of the most medically underserved and at-risk populations. By situating services in their schools, SBHC pioneers effectively eliminated barriers for economically deprived teens.*

In 1990, Congress severed the welfare-Medicaid link to expand insurance coverage to more children. But it would take a dozen years and a gradual phase in before all low-income teens would earn coverage. Not until 2002 were all states required to ensure Medicaid coverage to children up to 18 year olds and living in poverty. Consequently, patient revenue was a non-starter for SBHCs: Medicaid was largely unavailable to its primary customers and inconsequential to the SBHC business model.

By the mid-2000s, however, the number of state-level SBHC investments was on the rise. So, too, was the number of adolescents joining the swelling Medicaid rolls. Attitudes about billing and collecting patient revenue in SBHCs began to shift. Savvy public and private investors, stressing the ephemeral nature of soft moneys, began the process of hard-wiring (literally and figuratively) SBHCs to generate third-party revenues. This was a seismic shift for a charitable movement rooted in tearing down access (most especially financial) barriers. And the early dividends were hard to dismiss.

Over the past 15 years SBHC providers and advocates have come to embrace Medicaid as an ally, a tool for growth and sustainability. We’ve fought hard for the attention of national and state health finance policy leaders to understand that school health centers are mission critical to the goal of healthy, productive citizens. We’ve championed managed care carve outs and waivers, exemptions and cost-based formulas, essential community provider mandates, valued-based payments, and unique place of service codes. We want to be counted and accountable. SBHCs have proven repeatedly their success at breaking down intractable health access inequities. And several studies have demonstrated cost-savings to Medicaid.

I have no doubt that the continued growth of SBHCs will be made possible by Medicaid and its evolving role in health care. Like all payers, Medicaid is in rapid experimentation mode testing innovations with the promise of delivering greater value at a lesser cost. And true to form, adolescents aren’t in the forefront of reformations that are striving to bend the cost-curve yesterday. But ultimately, when short-term savings are squeezed out, health economists will need to extend their horizon of change. Perhaps, then, we can begin to acknowledge the long-term societal and personal costs associated with lousy health outcomes like childhood trauma, teen pregnancy, school failure, and early substance use. If Medicaid’s in it for another 50 years, they have a huge stake in solving these costly—and preventable—problems. And we hold one key to the solution.

*Source: Leininger, LJ. Medicaid expansions and the insurance coverage of poor teenagers. Health Care Finance Review. Fall 2009:vol 31(1):23-34.

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1 Comment

  1. by Jesse on July 31, 2015 at 5:55 pm

    Thank you for the poignant commentary that changing the health trajectory of adolescents today will impact the health outcomes and associated costs of tomorrow. While healthcare reforms rightfully focus on the high costs of poorly managed chronic diseases, it is critical to turn our attention to the prevention of those diseases or conditions before they begin — and that is often in early adolescence. School based health centers provide immediate and regular access to care that can address these issues early on. These cost savings should not be underestimated as we turn the curve through innovation and reform.

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