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What's Medicaid Got to Do With Early Childhood Development?

Two recent independent reports argue that Medicaid and CHIP could be effectively leveraged to improve early childhood for the 45 percent of American children served by these programs.
Eight-year-old Julie Jackson (left) and her three-year-old sister, Melissa Jackson, brave the early morning cold as they wait for the arrival of their father on the aircraft carrier USS Enterprise to Naval Station Norfolk November 10th, 2001, in Norfolk, Virginia.

The conditions of early childhood have an enormous impact on how the human brain develops.

It would be difficult to overstate how formative a child's early years really are on the rest of their life. Brain development, health, even economic prospects are all directly linked to conditions during the postnatal years. In two recent independent reports, researchers Elisabeth Wright Burak at the Georgetown Center on Children and Families and Debbie Chang at Nemours Children's Health System argue that two well-known federal programs—Medicaid and the Children's Health Insurance Program—could be effectively leveraged to improve early childhood for the 45 percent of American children they serve.

Despite a well-established body of research on the importance of early childhood, young children (those under the age of five) and their families receive relatively limited support in the United States. There is no guaranteed paid parental leave program, and subsidized childcare programs serve only a small percentage of eligible families. Meanwhile, high-quality private infant childcare costs more than college in much of the country, and access to cash assistance (see: the Temporary Assistance for Needy Families program) is virtually non-existent in many states.

Around the country, policymakers are taking steps to address this mismatch. Cities and states are implementing paid leave and universal preschool programs and exploring innovative means of financing evidence-based home visiting programs. Increasingly, as these new reports illustrate, state Medicaid programs are getting creative about how to provide young children with the services they need to thrive. To the experts who study early childhood, such a shift can't come soon enough.

"We do a fraction of what we need to do," says Joan Lombardi, the director of Early Opportunities, a consulting organization, and a former deputy assistant secretary for early childhood development under President Barack Obama. "And this is the most vulnerable period—this is the time when families need the most support."

As the two reports, and countless others issued over the years, make clear, the conditions of early childhood have an enormous impact on how the human brain develops. Back in 2007, researchers at the National Scientific Council on the Developing Child laid out the stakes:

An early, growth-promoting environment, with adequate nutrients, free of toxins, and filled with social interactions with an attentive caregiver, prepares the architecture of the developing brain to function optimally in a healthy environment. Conversely, an adverse early environment, one that is inadequately supplied with nutrients, contains toxins, or is deprived of appropriate sensory, social, or emotional stimulation, results in faulty brain circuitry. Once established, a weak foundation can have detrimental effects on further brain development, even if a healthy environment is restored at a later age.

In other words, a child's early life experiences—their exposure to abuse, neglect, toxic stress, poverty, and other forms of trauma, their access to a responsive caregiver—shape their lives. It also means that effective early interventions—high-quality preschool and home visiting programs, for example—can have outsize positive effects.

In the U.S., this science is gradually filtering into practice. Pediatricians around the country, prodded on by the American Academy of Pediatrics and various leaders in the field, are increasingly asking children and their parents about toxic stress and trauma. Hospitals and health systems are finding innovative ways to incorporate behavioral health screening and treatments (for children and parents) into routine pediatric care. Schools are implementing trauma-informed practices. Promising two-generation anti-poverty programs are grounded in the fact that it's extraordinarily difficult to improve children's lives without addressing their parents' economic outcomes and mental health. Many Head Start centers now provide wrap-around services to children and families and incorporate the neuroscience of trauma into their programming.

"Those early years have a long-term impact on learning behavior and health," Lombardi says. "It makes sense to get in front of that and to have a prevention strategy that will have a long-term impact on health, and cost savings around health."

But there remain enormous gaps in access to needed services. Countless young children fall through the holes, never receiving the services and interventions that could change their life trajectories. And there's no obvious infrastructure to reach young children during those early years, when interventions are most effective and efficient. While most every low-income child over the age of five in the U.S. attends public school, no such parallel exists for younger children. Less than 4 percent of eligible low-income children participate in Early Head Start, a federal program that provides family-centered services for young children and their families. While many more are in some kind of daycare setting, the early childhood care system is decentralized, informal, and characterized by significant state-level variations.

What's more, Chang, the Nemours researcher, points out that the long-standing U.S. tradition of administering children's health services as a federal-state partnership has produced substantial variations in program quality and access across the country. Given these realities, how could policymakers possibly go about identifying every two-year-old who would benefit from, for example, parent-child therapy?

This is where Burak and Chang's research on Medicaid and CHIP comes into play. Together, the two programs serve approximately 45 percent of all U.S. children under the age of six, and about 80 percent of young U.S. children living in poverty.

"Nearly half of all young children, and a higher percentage of low-income children, are in Medicaid or CHIP," adds Burak, the Georgetown researcher. "The question is, how do we use that opportunity to connect to them before they get to school? That regular doctor for the child is one of the most consistent places the system can reach these kids before they get to school."

As Burak details in her report, certain elements of Medicaid's design give the program a unique potential to address the social determinants of health. Medicaid's pediatric health benefit—the Early, Periodic, Screening, Diagnostic, and Treatment—has a particular focus on prevention and is significantly more generous and comprehensive than the program's adult benefits. Under the EPSDT, states are required to provide children with a set of recommended preventive screenings and well-child visits, diagnostic assessments, and "medically necessary" services that prevent, treat, or improve diagnosed conditions. (States vary in their exact interpretation of this provision.)

Some states are already utilizing the comprehensiveness of this provision to address the "social determinants" (i.e. family and environmental factors) of children's health. According to Burak's report, spurred by Department of Health and Human Services guidance on Medicaid policy around home visiting and maternal depression screenings, 33 states have begun to fund some aspects of home visiting programs for pregnant women and the parents of young children through Medicaid. Thirty-seven states, meanwhile "allow, encourage, or require maternal depression screenings during well-child visits"; 25 states reimburse providers for those screenings.

States have also begun relaxing and reexamining requirements for mental-health treatment—in Colorado, beneficiaries can now receive a limited amount (up to six visits) of mental-health treatment in primary care visits without a formal diagnosis. States have also created new criteria and billing codes for infant mental-health treatment, which is typically heavily focused on improving parent-child attachment and interactions.

Chang points to Medicaid policy changes surrounding the coordination and navigation of care as an example of the kinds of shifts that can help families. Today, Medicaid programs in many states will cover things like translation services for non-English speakers, transportation to medical appointments, and even assistance from coordinators who can help recipients access the services they need.

"The idea is to help these families navigate the system—so we're not just referring them somewhere. Somebody's gotta make sure that that family gets what they need to follow up and receive the actual service they were referred to," Chang says.

Chang's report also calls for new partnerships between Medicaid and the early childhood sector. Childcare facilities, for example, often perform developmental screens that could be performed, and sometimes are, in a doctor's office (and reimbursed by Medicaid).

"You have a situation where important, vital, scarce resources in the early childhood sectors are being used for developmental screenings that Medicaid could be paying for in a doctor's office," Chang says. "There's a huge opportunity to have these two systems of care who serve the same population work in a coordinated way."

Perhaps the strongest argument for increasing Medicaid's role in addressing the social determinants of health in early childhood is that, in an era of legislative gridlock, many of the changes Burak and Chang's reports call for can be implemented by state regulators and encouraged by guidance from the Department of Health and Human Services.

"These don't necessarily require a big change in state law," Burak says. "We wanted states to know that this is something you can do, and maybe you should be doing."