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Health care financing policy affirms values to promote child health, well-being

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The U.S. health care system has changed substantially over the past several years as challenges related to the COVID-19 pandemic, social drivers of health, and racial and ethnic and other inequities have become increasingly apparent. The complexity of the health care system continues to evolve post-Affordable Care Act, with new payment and coverage models presenting opportunities and challenges to financing health care for children.

In response to these changes, the AAP has updated its 2017 policy statement Principles of Child Health Care Financing. This foundational statement affirms the overarching values related to financing children’s health care that guide AAP clinical, policy and advocacy efforts to promote the health and well-being of all children.

The policy, from the AAP Committee on Child Health Financing, is available at and will be published in the September issue of Pediatrics.

The recommendations for child health care financing reflect the following guiding principles to ensure all children have access to affordable, equitable, high-quality health care.

Coverage with quality, affordable health insurance should be universal.

All children, adolescents and young adults from birth to age 26 who reside in the U.S. should be covered by an affordable, quality health insurance plan that allows access to comprehensive, necessary care. Coverage options for public and private insurance for children should include plans with pediatric provider networks broad enough to ensure equity in access to pediatricians and pediatric specialists, especially for children with special health care needs.

To ensure continuity, health insurance coverage should pose minimal enrollment and renewal burdens.

Strengthening and providing full federal funding of Medicaid should be prioritized.

Comprehensive pediatric services should be covered.

Health insurance should offer a comprehensive, age-appropriate benefit package spanning the full continuum of pediatric health care across all geographies and insurance products. The Early and Periodic Screening, Diagnostic and Treatment model, with its coverage mandate for all medically necessary services, should be the standard for coverage of pediatric health benefits in public and private insurance programs. Mental health parity also should be enforced.

Cost-sharing should be affordable and should not negatively affect care.

Cost-sharing should encourage judicious use of appropriate care but not inhibit access to preventive or necessary care. Public and private payers should establish cost-sharing policies with annual out-of-pocket limits at reasonable levels that account for family income. Medicaid and the Children’s Health Insurance Program should continue to have little or no cost-sharing for children.

Payment should be adequate to strengthen family- and patient-centered medical homes.

Payments for pediatric health care services should be structured to achieve parity with payments for similar services for adults, with sufficient margins to sustain adequate numbers of high-quality pediatricians and pediatric subspecialists. Payment should at least equal Medicare rates for comparable procedure codes.

Alternate payment methodologies should provide sufficient payments reflecting the complexity of medical home services. Capitated payments for pediatric medical homes and specialists should be risk-adjusted based on the medical and social complexity of patient panels, using methods specific to pediatric populations.

Equity should be promoted and longstanding health and health care disparities in child health financing policy addressed.

Structural racism and wide variation among states in setting, enforcing and funding Medicaid policy has led to striking geographic, racial and ethnic inequities in children’s coverage, access and quality. National standards should be established and enforced so that children will not lack access to or coverage for health benefits or pediatricians based on their residence in a given state.

Children enrolled in publicly funded insurance need similar access to primary and subspecialty care as their privately insured counterparts.

All immigrant children, regardless of documentation status, should be eligible for enrollment in noninferior public insurance programs.

Child health financing policy must be designed to reflect the unique characteristics and needs of children.

Payment and delivery models such as integrated delivery systems and accountable care organizations should be designed with input from pediatricians and pediatric specialists who have expertise in practice and financing. Pediatric-specific, evidence-based metrics should inform quality- or value-based payments.

While most health plans focus on achieving short-term returns on investment, appropriate regulation is necessary to achieve the unique long-term benefits of pediatric health care.

These foundational principles should guide policymakers and payers in reforms to preserve and enhance hard-won coverage and access gains for children.

Dr. Galbraith is a lead author of the policy statement. She is a member of the AAP Committee on Child Health Financing.

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