Fact Check: "Medicaid formula for sick children costs more than a mortgage."
What We Know
The claim that the Medicaid formula for sick children costs more than a mortgage can be evaluated through recent studies on healthcare spending for children with Medicaid insurance. According to a study by Doupnik et al. (2020), children with mental health (MH) conditions accounted for 55% of Medicaid spending among 3- to 17-year-olds, with the highest-spending group incurring an average of $164,003 per member per year (PMPY) in total healthcare spending, compared to $6,097 PMPY for the typical-spending group (source-1).
In another study by Kuo et al. (2015), it was found that the top 1% of pediatric patients accounted for a significant portion of healthcare spending, with PMPY costs rising dramatically as resource use increased (source-2). This indicates that a small percentage of children with complex health needs can incur costs that rival or exceed typical mortgage payments.
Analysis
The claim hinges on the comparison between Medicaid spending for sick children and average mortgage costs. The average mortgage payment in the U.S. varies widely, but as of 2023, the typical monthly mortgage payment is around $1,500 to $2,000 depending on location and loan terms. Annually, this translates to approximately $18,000 to $24,000.
When comparing this to the average annual Medicaid spending for the highest-spending children, which is $164,003, it becomes evident that the costs associated with high-need children in Medicaid far exceed typical mortgage payments. This suggests that for a small subset of children, the costs can indeed be more than a mortgage, supporting the claim to some extent.
However, it is crucial to note that this spending is not representative of all children on Medicaid. The majority of children incur significantly lower costs, with the typical-spending group averaging $6,097 PMPY (source-1). Thus, while the claim holds true for a specific group of high-cost patients, it does not reflect the overall Medicaid expenditure for all sick children.
The studies cited are credible, published in peer-reviewed journals, and provide a robust analysis of healthcare spending patterns. However, they focus on specific demographics (children with mental health conditions) and may not encompass all children covered under Medicaid.
Conclusion
Verdict: Partially True
The claim that the Medicaid formula for sick children costs more than a mortgage is partially true. While it accurately reflects the high costs associated with the top 1% of high-need children in Medicaid, it does not represent the average costs for all children on Medicaid. The significant disparity in spending between the highest and typical-spending groups illustrates the complexity of healthcare costs in this demographic.
Sources
- Healthcare Utilization and Spending for Children with Mental Health Conditions in Medicaid - Link
- Comparison of Health Care Spending and Utilization Among Children With Medicaid Insurance - Link
- Variations in the Medicaid Safety Net for Children and Youth with High Medical Costs: A Comparison of Four States - Link
- Matching rates - Link
- House Budget Committee Circulates New Detailed List of Budget Reconciliation Options - Link
- Understanding Medicaid Home and Community Services - Link
