Medicaid cuts could leave parents struggling to find pediatric care

Idaho is cutting how much it pays doctors, dentists, therapists, and others who treat Medicaid patients to close a budget gap. Pediatric practices are feeling it most, since about half the nation's kids have insurance through the joint state-federal program. Other states are now weighing similar cuts to the program that covers more than 70 million people.

Medicaid meant everything to Cari Warren when her kids were little. It covered vaccines and doctors’ visits.

“It was ginormous in helping me raise my children and afford healthy things for them,” Warren said.

Now, Warren sees the other side of Medicaid. She runs business operations for Coeur d’Alene Pediatrics in northern Idaho, where 40% of the practice's patients have Medicaid.

Warren said the payment is so low it doesn’t even cover the cost of a patient visit, which leaves practices like hers on thin margins. Then, last year, Idaho cut how much it pays doctors across the state, pushing her practice over the edge.

“There's been tears, sadness, anger, bitterness, frustration,” she said.

After losing 13% of their revenue, the doctors made the tough call to sell their practice to a local community health center, which gets paid more to see these patients.

“It was just a move we had to make to protect our community,” Warren said. “That's our biggest focus — ensuring that the community has care.”

Idaho may be a warning sign of what’s to come. States are facing budget shortfalls driven by tax cuts and an anticipated $1 trillion reduction in federal spending on Medicaid over the next decade.

In Colorado, for example, the state already pulled back a Medicaid rate increase. The governor said the 2025 tax bill forced the change, as the new law shifts more Medicaid costs to states. Diane Alexander, an economist at the Wharton School of Business at the University of Pennsylvania, said that forces a choice: cut benefits or how much doctors are reimbursed.

“It's really difficult for states to be kind of generous on both of those at the same time,” she said.

Alexander’s research found that in 2013, when the Affordable Care Act temporarily raised Medicaid rates, it made a big difference. Increases as small as $10 per visit made it easier to see a doctor.

“It doesn't sound like that much on paper,” Alexander said. “On the other hand, that was a 10% to 15% increase in baseline rates.”

A few years later, when rates went back down, people felt that impact in reverse, Alexander said. “Within a year, most of the gains had been lost when the payments went back down.”

Alexander worries that if states cut rates again, we could see similar effects — meaning people have insurance on paper, but they’ll have trouble finding a doctor who will see them.

Children’s care could be hit especially hard, warned Dr. Andrew Racine, president of the American Academy of Pediatrics.

“In pediatrics, we don't like to be catastrophists because our glass is always half full,” he said. “This is the most significant threat to Medicaid in the history of the program.”

Racine warns that reimbursement or coverage cuts could escalate the trend of hospitals closing or scaling back pediatric services. Since 2008, hospitals have closed a third of pediatric inpatient units, including pediatric intensive care units or PICUs.

“It doesn't matter whether you're on Medicaid or not. If there's no PICU, there's no PICU,” Racine said.

Dr. Elizabeth Parsons, a pediatrician at Pocatello Children’s Clinic in southeastern Idaho, is worried about her practice’s future. To cope with the cuts, she and her colleagues are taking a 25% pay cut and working longer hours.

“It's become more difficult for us to see Medicaid patients because the margins have become negative,” Parsons said. “I hope that we could survive. I don't know.”

Pediatricians worry that the cuts, combined with expected coverage losses, will leave kids in a lurch and unable to get basic care to keep them healthy.