Medicaid and the Children’s Health Insurance Program (CHIP) are crucial for children’s access to hospital care and pediatric health services—particularly as they cover half of all children in the United States.

In a JAMA Pediatrics research letter, SHP’s Lee Sanders, MD, MPH, argues that with the looming cuts to Medicaid, it’s essential to understand how changes to pediatric hospitals could affect families’ access to care, as well as the financial stability of health systems.

Sanders, a pediatrician at the Stanford University School of Medicine and a professor of health policy, joined nine other pediatricians and researchers at hospitals nationwide, to conduct a retrospective cohort study using AHRQ’s 2022 Kids’ Impatient Database. It includes all U.S. hospital discharges for newborns and children under 21, from 3,811 hospitals in 48 states and Washington, D.C.

They found that in 2022, Medicaid and CHIP covered nearly half of all pediatric hospitalizations in the United States—48.3% of all discharges, including 44.2% of newborns and 54.9% of non-newborns. Children covered by Medicaid were disproportionately from historically marginalized groups and low-income communities: 28.6% were Hispanic, 20.7% were non-Hispanic Black, and two-thirds lived in ZIP codes in the lowest income quartile. Medicaid was also the primary payer for most hospitalizations involving children with complex chronic conditions and those living in rural areas.

“Compared with past studies, this finding highlights Medicaid’s critical role in pediatric inpatient care—underscoring a growing dependency that warrants urgent policy attention to safeguard and strengthen this essential coverage,” Sanders and his colleagues wrote. “In the current study, Medicaid supported pediatric inpatients regardless of age, chronic condition status, geographic location, or household income—demonstrating its critical role in meeting the needs of newborns and older children alike, in both rural and urban settings.”

Medicaid’s Financial Footprint

In 2022, Medicaid discharges accounted for $119.5 billion—more than half of all pediatric hospital charges nationwide—a figure the researchers called “striking.”  They found that rural hospitals relied more heavily on Medicaid than urban hospitals, even though they saw far fewer pediatric patients. Meanwhile, just 10% of urban hospitals handled more than half of all Medicaid pediatric discharges, underscoring how children’s inpatient care is highly concentrated in a small share of facilities.

“Because Medicaid covers a large portion of pediatric hospitalizations, especially in rural communities, reductions in Medicaid spending to hospitals could stress pediatric health systems and families nationwide,” Sanders wrote.

The researchers said the Rural Health Transformation Program, part of the Trump administration’s One Big Beautiful Bill Act (OBBBA), may offer important support for rural hospitals, where Medicaid provides critical financing for care. The RHT Program is set for $50 billion to be allocated to “approved states” over five years, beginning next year.

The OBBBA would cut Medicaid and CHIP by more than half a trillion dollars, however, according to the nonpartisan Congressional Budget Office, due in part by eliminating coverage for 10.5 million people from the programs by 2034.

A Turning Point

In an editorial accompanying the study, two pediatricians called these cuts and moves to push responsibility to the states a potential “step backward.”

“The recent One Big Beautiful Bill Act will challenge states to maintain coverage for vulnerable children and families and stretch health systems to their limits,” wrote Aditi Vasan, a pediatrician at Children’s Hospital of Philadelphia, and Jeffrey P. Brosco of the University of Miami Health System.

They note that Medicaid is also the backbone of coverage to children with special health care needs.

“The bill’s proponents have framed their goal as eliminating waste, fraud, and abuse by ensuring that no one who is able to work is taking advantage of Medicaid benefits,” they said. “Federal Medicaid spending reductions of this magnitude, however, will impact not just Medicaid beneficiaries, but all children and families seeking care at hospitals and clinical practices that rely on Medicaid funding.”

At the same time, the physicians encouraged child health advocates to use this moment to confront the limits of the current Medicaid and CHIP programs, which has evolved through decades of piecemeal policy decisions and leaving the United States as the only high-income nation without universal child health coverage.

“As the forthcoming Medicaid cuts unfold, we as pediatricians, researchers, and policy leaders are charged with continuing to serve children to the best of our ability despite reduced resources, advocating for reforms that preserve children’s coverage—and measuring and documenting the impacts of these cuts on child health and well-being.”