July 30 marked the 55th birthday of Medicaid and Medicare. This anniversary, noted at a time of great health peril in our country, offers us an opportunity to address the needs of our children. 

As a pediatrician with many years of commitment to the care of children, here and worldwide, I am fearful as the pandemic takes its toll. Low-income children are especially impacted by the pandemic as their parents are more likely to become infected, their virtual online learning is limited by lack of internet access and needed computers/tablets and they no longer are receiving school lunches.  

Dr. Stephen Berman

On July 30, 1965, LBJ signed into law two amendments to the Social Security Act of 1935, creating the Medicare and Medicaid programs. When the Social Security bill passed in l934, medical benefits were not included. Congress could obtain the necessary votes to pass legislation creating Social Security with universal, fully federally funded support only for the elderly. 

For all others needing essential services, support would be relegated to private charity or states. So for seniors, the 1965 amendments remedied the 1934 failure to pass a medical component in the new Social Security Act. 

In 1965, LBJ and the U.S. Senate tried to create a unified, universal health coverage program funded by the federal government, but southern conservatives in the House blocked the effort, granting Medicare for the elderly only. A compromise solution was to patch together a separate Medicaid amendment, creating a program to help the poor; specifically children, the disabled and the elderly needing care in nursing homes. 

However, in deference to the will of racist southern legislators, Medicaid was designed as a federal-state funded program administered by the states so state legislatures could reduce its scope or block the program at will. 

This unrecognized compromise stemming from southern intolerance created the structural foundation for how we now provide care to a large proportion of America’s children, especially those of color. Fifty-seven percent of children and youth with Medicaid insurance are people of color, while people of color make up 39% in the U.S. child population. 

Medicaid, while having many worthwhile and positive aspects, is at its core a prejudicial relic for children’s health and wellbeing because of that compromise. Medicaid perpetuates inequity in health care through widely-divergent state programs and low payment rates.   

Medicaid and Medicare have major differences. All Medicare funding comes from the federal government, whereas states and the federal government jointly fund Medicaid. States, as major Medicaid payers, set widely variable rules – who’s eligible, what benefits they get, and how much the program pays providers. 

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A child eligible in one state may not be eligible in the next. State-level variability leads to a patchwork of Medicaid programs that penalizes families living in states with more limited programs. Recent Medicaid changes, adult work requirements and expanding “public charge” definitions for people seeking citizenship, make enrollment even more difficult for low-income people and people of color. 

After decades of steady improvement, rates of U.S. children and youth with health insurance have recently declined because of these policies. Much as redlining created housing segregation leading to school segregation, Medicaid perpetuates a segregated health care system.  

Medicaid payment averages only about two-third of Medicare for the same services. Although federal legislation guarantees Medicaid beneficiaries equal access to services, this payment disparity among states causes many minority children and youth to have difficulty accessing needed health care.

As the federal government addresses pandemic relief legislation and more federal support for Medicaid, it should begin to consider how best to transform the part of Medicaid that provides health care services for children and youth. New relief legislation must address the dire financial conditions of most states, in part because Medicaid consumes much of every state’s budget, even in good economic times. 

The COVID epidemic has led to soaring unemployment, more Medicaid enrollees, and greatly reduced tax revenue projections, further straining shaky state budgets. Long a major source of health care financing for low-income children and youth, Medicaid with the companion Children’s Health Insurance Program (CHIP) insures close to half of U.S. children and youth. But many states still lag behind others.

The federal pandemic response has put a spotlight on this major structural problem in our health care system. The pandemic has brought into focus the need to make a fundamental change that addresses the failings and limitations of the Medicaid program. 

We can do this by passing legislation for a universal program that will enroll all children and youth to age 26, with fully federal financing and guaranteed enrollment regardless of race or income.   

Now is the time to recognize the negative impact of the discriminatory compromise that created Medicaid in 1965 during a very different time in America. It is time for Congress and the next president to make sure America’s children are treated as fairly as the elderly by taking Medicaid for children out of state budgets and fully federalizing this essential program.  

Solutions to the health care crisis must ensure fairness, equity and justice for all children. The new program should have:

  • Benefits that address the specific physical, mental, emotional and behavioral needs of children and youth, and support prevention of threats to children’s wellbeing.
  • Payment and accountability that focus on population health achievements through comprehensive pediatric primary care connected with strong community services and backup through good access to high quality pediatric-specific subspecialty care and hospitalization when needed.
  • Use of long-term outcomes to achieve best health and wellbeing of young Americans  and coordinating the health sector with what works in areas of poverty reduction, family leave and integrated services. 

We call for a broad-based coalition to build out this vision, bring it to reality, and monitor outcomes.

Dr. Stephen Berman is a long-time pediatrician at the University of Colorado and The Children’s Hospital Colorado and a past president of the American Academy of Pediatrics.

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Stephen Berman, of Denver, is a pediatrician, professor of pediatrics and public health, and emeritus Children's Hospital Colorado Endowed Chair in General Pediatrics at the University of Colorado School of Medicine. He is co-chair of The Bell...