How Oregon Could Cut Disabled Kids' Services in Response To Trump Budget Bill
Plus: Etsy-like marketplace for disabled creators launches; Zika moms band together in Brazil; Judge rejects Maine's attempt to weaken settlement
President Trump’s budget bill passed last July is known by several names. Originally called the One Big Beautiful Bill Act, Republicans have since tried rebranding it to the Working Families Tax Cut, and when it was signed it officially became Public Law 119-21.
To side-step the name debate, I see most folks refer to it as H.R. 1.
As recently as last month, Congressional Republicans have repeatedly insisted that this bill will not affect services for the traditional Medicaid population, which includes American disabled children.
They are sort of right, but sort of not.
The devil is in the details.
To unpack this, I’ll focus on the state I know best: Oregon, where I have lived most of my life and spent several years as a newspaper reporter.
How Oregon does Medicaid
The Oregon Health Authority (OHA) is the state’s Medicaid authority. Medicaid services — health coverage, disability supports and even rental assistance — are funded by the state, matched with federal dollars. Oregon portions off the social services stuff, like home care, to the Oregon Department of Human Services (ODHS) to administer.
Oregon has an obligation to balance its budget — it can’t run a deficit, like the federal government can. If the state can’t pony up its portion, it doesn’t get the federal match. That match — called the Federal Medical Assistance Percentage or FMAP — varies widely by program.
Medicaid started in the 1960s as health insurance for very low income people. The idea was an offshoot of the 1930s Social Security concept that we should ensure that our nation’s elderly didn’t have to eat out of the trash (yes, literally). Medicaid expanded in the 1970s to disabled children. Then, in the early 1980s, an Iowa middle school teacher pointed out that Medicaid would pay for her daughter to live in a hospital but nothing if she came back home. Because of that mom, Julie Beckett, lawmakers added a “parental income disregard” option and the Katie Beckett waiver was born. This means that for the purposes of determining Medicaid eligibility, the disabled child becomes a “household” of one — their parents’ income is disregarded. More on that later.
During the Affordable Care Act (“Obamacare”) expansion, the federal government incentivized states to cover more people by offering to pay 90 percent of the costs. So now, in a kind of perverse twist, the FMAP is now higher for an able-bodied adult than for a disabled child. If a person like my son qualifies for Oregon Health Plan (OHP) under the income limits, the federal government pays 90 percent of his health costs. If he is “only” disabled but not under the income limit, he still qualifies for OHP, but the federal government will pay under the old formula — currently 57.7 percent. (The exact figure varies year-to-year and state-by-state. You can check your state’s match here.)
Medicaid is not just for care you get at hospitals and clinics. It is also how America pays for “Long-Term Services & Supports” — usually lifelong care for disabled children and adults. This is how we pay for institutions, nursing facilities, group homes and also in-home care. Home and Community Based Services (HCBS) are often called “waivers” because they “waive” traditional Medicaid rules and find innovative ways to keep folks at home, instead of Medicaid-funded nursing facilities.
H.R. 1 cut funds and raised requirements
What does all of this have to do with H.R. 1? According to presentations made this fall to the Oregon legislature, Trump’s budget bill will result in lost revenue and increased costs in a number of ways. I’m going to focus on two of them.
First, H.R. 1 capped how much tax the state could charge medical providers and then recycle that money to pay its share of Medicaid costs, boosting how much money it got in FMAP. Remember, the state chooses the services it’s willing to pay for; the federal dollars match state funds. By running this kind of circular tax-and-payback scheme, the state can make it look like it’s putting in more Medicaid money than it really is. H.R. 1 limited these tax rates to 3.5 percent, representing millions of lost dollars for states like Oregon, which were charging closer to 6 percent. (More on H.R. 1 and provider rate taxes here.)
Second, H.R. 1 added additional work requirements and a six-month review process (instead of annual) to Medicaid and Supplemental Nutrition Assistance Program (SNAP or “food stamps”) recipients. It also raised the state share of SNAP administration costs from 50 percent to 75 percent. It’s important to note that even though disabled children should be exempt from these new reporting requirements, administrators will have to confirm that they are exempt. It is still unclear how much paperwork this will create for families who are “exempt” from these new rules. But Oregon administrators believe they will need a lot of money to staff this additional workload so that doesn’t sound like an automatic process to me.
In addition to H.R. 1, Oregon has two other unique budget woes. A lawsuit over its much-maligned foster care system ("Wyatt B. v Kotek”) means it needs to throw enough money at that system to stop housing foster kids out of state or in motels. And, we have this thing called a “kicker” where any tax collected above a certain ceiling gets kicked back to taxpayers.
Oregon is currently projected to be $63 million short for the 2025-27 budget cycle.
Disabled kids’ services on the chopping block
State Sen. Wlnsvey Campos, co-chair of the Joint Interim Committee on Ways and Means Subcommittee on Human Services, said it is unusual for the state to be talking cuts mid-cycle. She placed the blame squarely on Congressional Republicans. “I just want to note how unusual it is for us to be going into a short session and having these conversations around reductions,” Campos said at the subcommittee’s Nov. 17 meeting. “Unfortunately we are here. These conversations are necessary given the choices that have been made at the federal level — with the passage of H.R. 1.”
As with many agencies, the Oregon Department of Human Services regularly engages in “what if” budget exercises to offer savings options to legislators. Their slate of cuts offered up Nov. 17 has a number of items offering various levels of savings — some are above a 2.5 percent budget cut and others are above a 5 percent cut. In the options for cuts, they did not offer any cuts to the Oregon Eligibility Partnership (OEP), which checks the eligibility of the nearly 1.4 million people in $18.7 billion worth of social programs. (Oregon’s total population is close to 4.3 million.)
What is high on the list of options — above the 2.5 percent cut line (item 54, to be precise) — is kicking 2,300 disabled children off of Medicaid. They would lose access to medical care, therapies, home care and more, thrusting their families into making impossible choices. This would be accomplished by getting rid of the “parental income disregard” waiver. ODHS estimates doing that would save the state $36.8 million in general funds. It also would mean Oregon would lose out on $67.8 million in federal matching funds.
Note: H.R. 1 did not change the federal match rate for these kids at all. Not for better; not for worse.
One more minor detail: cutting this program might be against the law. “This reduction requires waiver amendments to be submitted and approved by [the Centers for Medicare and Medicaid] and may have ADA/Olmstead legal implications,” notes ODHS in the fine print. The Americans with Disabilities Act is the law that was used in the landmark Olmstead v. L.C. Supreme Court decision that requires states to allow disabled children and adults services they need to live in their homes and communities, rather than segregated settings.
There’s no argument here: disabled kids are expensive. Though children with medical complexity represent only 6 percent of all children enrolled in Medicaid, they account for about 40 percent of its pediatric spending.
But I do question why any disabled child’s benefits are on the chopping block ahead of other options. Oregon’s ONE system, for example, is a notorious IT headache for many who have to use it to access OHP, SNAP and other benefits. It cost the state nearly half a billion dollars to set up and $47 million per year to administer, according to a recent audit.
More than 3,300 state employees can access client case data, make entries or add corrections in ONE. That’s a heck of lot of staff.
And yet, somehow, disabled kids are the ones more likely to soon be asked to tighten their belts.
Exciting news: I’m teaming up with Little Lobbyists to fight for policy change in Oregon and beyond. Little Lobbyists was started by two medical mamas in 2017 to get the stories of medically complex kids into the news and on Capitol Hill. Since H.R. 1 moved the fight for services to the states, they are leaning into creating statewide chapters. Join Little Lobbyists Oregon’s Facebook group or join the national group to find (or start!) your own state chapter.
Medical Motherhood’s news round up
Snippets of news and opinion from outlets around the world. Click the links for the full story.
• From NPR: “The Brazilian moms fighting for their children ten years after Zika
[…]MILES PARKS, HOST: Ten years ago, Brazil was hit with a strange and terrifying health crisis. Moms infected with a particular virus during pregnancy were giving birth to children with a debilitating condition. For a while, the Zika crisis drew a lot of attention, but eventually the world moved on.
PARKS: Zika, a mosquito-borne virus that hijacks a protein critical for brain development - the doctors told [Mom Ruty] Pereira that like many children born to mothers infected with Zika during pregnancy, Pereira’s baby, Tamara, had something called microcephaly, an underdeveloped brain. Her baby, they said, was unlikely to ever walk or talk.
[…Reporter ARI] DANIEL: In Brazil, low-income families with a disabled child typically receive free public housing, but that wasn’t happening for these moms. They made phone calls, but Pereira says the authorities never responded. So on a hot day in 2020, she joined other moms to protest near a government housing office.
[…]PEREIRA: (Through interpreter) If you don’t fight, if you don’t show yourself up, people think that everything’s perfect, and it’s not perfect at all.
DANIEL: She says the protest was empowering [...]And humiliating. People would shout, go back home, get some clothes to wash. But it took just one day. The women got a meeting with the right official who ultimately helped them secure free housing. They were now homeowners.
[…]PARKS: Here, Pereira is no longer alone. Her neighbors are the mothers and children she fought alongside to get this housing.
PEREIRA: (Through interpreter) These ladies - they are - I call them my third arm. We are resistance sisters.[…]
• From Central Maine: “Judge rejects effort by Maine, DOJ to alter settlement on disabled children’s services”
A U.S. District Court judge ruled last week that Maine and the U.S. Department of Justice cannot change requirements of a settlement agreement designed to address the state’s violation of the civil rights of children with disabilities.
The Justice Department declared in 2022 that Maine was out of compliance for over-institutionalizing disabled children in psychiatric hospitals, residential treatment facilities and a state-operated juvenile detention facility.
[…]Among other issues, Maine lacked sufficient treatment options for children with behavioral health issues, at times leading to children languishing in hospital emergency rooms while awaiting placement for treatment. In one high-profile case, a 13-year-old girl spent nearly a year in the Redington-Fairview General Hospital emergency department in Skowhegan before she was placed in a group home in Orono in 2024.
[…]On Nov. 24. U.S. District Judge Stacey Neumann denied the attempt to alter the settlement, which would have done away with a number of requirements, including the independent reviewer position meant to track Maine’s progress.
The alterations also would have dropped a requirement that the state conduct “community reintegration planning for children committed to a juvenile correction facility,” Neumann wrote, and that the state conduct community outreach with families and other stakeholders.
[…]Atlee Reilly, [Disability Rights Maine’s] managing attorney, said in a press release Friday[:] “We are hopeful that Maine and the United States will now turn their focus and resources toward implementing the original settlement they negotiated and addressing the longstanding failure to deliver appropriate services to children in their homes and communities.”[…]
• From The Detroit News/TNS via Disability Scoop: “Etsy-Like Online Market Launches For Sellers With Disabilities
Backed by nearly $2 million in seed capital, including $350,000 of his family’s money, Dave Meador is launching a not-for-profit, Etsy-like e-commerce website for sellers with disabilities who make items ranging from jewelry and Christmas tree ornaments to personalized tumblers.
Meador’s now 30-year-old daughter is one of the first makers whose greeting cards and custom-made jars of slime were for sale when TroveMarket.com […] went live for buyers on Thanksgiving Day.
[…]The statistics are particularly dreary for people with developmental disabilities getting jobs and maintaining gainful employment. The Autism Society of America estimates the unemployment rate for adults on the autism spectrum to be as high as 85%.
Trove Market was incorporated as a 501(c)3 charity under the Internal Revenue Service code, so its sellers are limited to annual earnings of 250% of the federal poverty level or $39,125.
[…]Meador and the backers of his new not-for-profit venture (including his former employer) see the e-commerce business model of Trove Market as a pathway for people with disabilities to gain a foothold in the economy with a microbusiness that can supplement their income.[…]
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