The Medicaid Crisis: Balancing Budgets on the Backs of Autistic Children

Introduction: A Looming Healthcare Catastrophe

Across the United States, state Medicaid agencies are confronting an impossible dilemma: how to provide essential autism services to children while containing skyrocketing costs. Applied Behavior Analysis (ABA) therapy, a intensive intervention that helps children with autism spectrum disorder develop communication skills, social abilities, and adaptive behaviors, has become increasingly expensive as diagnosis rates rise and demand grows. With federal Medicaid cuts looming through legislation like the One Big Beautiful Bill Act, states are implementing drastic measures that threaten access to these vital services. This crisis represents not just a budgetary challenge but a fundamental test of our nation’s commitment to protecting its most vulnerable citizens.

The Facts: Rising Demand and Shrinking Resources

The statistics paint a stark picture of the challenge facing Medicaid programs. According to CDC data, approximately 5% of children ages 3 to 17 on public insurance have autism spectrum disorder, compared with only 2% of those with private insurance. This disparity highlights the critical role Medicaid plays in serving this population. Since 2014, when federal regulations mandated coverage of comprehensive autism services, every state Medicaid program has covered ABA therapy by 2022.

The financial burden has been staggering. In Indiana, Medicaid spending on ABA therapy exploded from $21 million in 2017 to $611 million in 2023—an increase of over 2,800%. Nebraska saw payments surge from $4.6 million in 2020 to over $85 million last year. North Carolina projects costs will reach $639 million in fiscal 2026, representing a 425% increase from 2022. These dramatic escalations have prompted states to implement cost-control measures including therapy hour caps, reduced reimbursement rates, tightened provider rules, and eligibility changes.

The federal government has compounded the pressure with over $900 billion in planned Medicaid cuts over the next decade. Meanwhile, audits have identified millions in improper payments, such as the $56 million in questionable ABA payments found in Indiana during 2019-2020. These findings have led to increased scrutiny and further justification for austerity measures.

The Human Impact: Families in Crisis

Behind these statistics are real children and families facing unimaginable challenges. ABA therapy, which can require 10-40 hours per week, represents a lifeline for development and independence. As Jason McManus of Indiana Providers of Effective Autism Treatment notes, ABA allows people with autism “to obtain the highest level of independence that’s possible for them.”

The cuts have immediate and devastating consequences. In Nebraska, providers received only 30 days’ notice before reimbursement rates were slashed by up to 48%, forcing immediate salary reductions and clinic closures. Families like Angela Gleason’s, whose 13-year-old son Teddy relies on ABA for socializing and speech development, face dwindling options as providers struggle to survive financially. Older children particularly suffer, as many companies focus exclusively on very young children, leaving teenagers with limited resources.

Legal challenges have emerged, such as the lawsuit in North Carolina where families successfully obtained a preliminary injunction against rate cuts for autism services, arguing they disproportionately targeted children with disabilities. However, the reprieve may be temporary, and the stress on families continues unabated.

The Principle at Stake: Healthcare as a Fundamental Right

From a constitutional and humanistic perspective, this crisis raises profound questions about our nation’s values. The preamble to the Constitution establishes promoting the general welfare as a fundamental purpose of government. Denying essential healthcare to vulnerable children directly contradicts this principle. While fiscal responsibility is important, it cannot come at the expense of human dignity and basic rights.

The situation represents a failure of both policy and morality. States are reacting to cost pressures with blunt instruments that punish providers and patients alike, rather than developing sustainable, thoughtful solutions. The rapid implementation of cuts without adequate analysis of actual costs or alternatives demonstrates a troubling disregard for due process and evidence-based policymaking.

The False Economy of Austerity

Cutting ABA services represents a classic case of false economy. While immediate savings might appear on balance sheets, the long-term costs to society will be far greater. Children who don’t receive appropriate interventions may require more intensive—and expensive—support throughout their lives. They may struggle with education, employment, and independent living, increasing their reliance on social services rather than contributing to their full potential.

The working group convened by Indiana Governor Mike Braun acknowledged this reality, noting that without policy changes, ABA spending would reach $825 million by 2029. However, the recommendation to simply lower reimbursement rates without addressing underlying cost drivers fails to solve the systemic problem. Sustainable solutions require comprehensive reform, not just budget cuts.

The Danger of Scapegoating Vulnerable Populations

There is a disturbing pattern in public discourse of framing healthcare for vulnerable populations as unsustainable or excessive. When officials describe autism as an “epidemic” or focus exclusively on cost growth without context, they risk dehumanizing those who need support. The debunked vaccine-autism theory promoted by HHS Secretary Robert F. Kennedy Jr. further compounds this problem by spreading misinformation that distracts from real solutions.

We must resist narratives that pit taxpayers against children with disabilities or portray essential healthcare as a luxury. In a compassionate society, we measure our strength by how we treat those most in need, not by how efficiently we cut services to them.

Toward Sustainable Solutions: Principles for Reform

Addressing the ABA funding crisis requires approaches that honor both fiscal responsibility and human dignity. Several principles should guide reform:

First, reimbursement rates should be based on actual cost studies rather than arbitrary comparisons to other states. As Leila Allen of Lighthouse Autism Center noted regarding Nebraska’s cuts, “There was no cost survey to determine what the cost should be.” Policies must account for regional variations in operating costs, particularly in rural areas where providers face additional challenges.

Second, states should invest in fraud prevention and quality assurance rather than across-the-board cuts. The $56 million in improper payments identified in Indiana demonstrates the need for better oversight, but punishing all providers and patients for the actions of a few is unjust.

Third, policymakers should consider innovative delivery models that maintain quality while controlling costs. This might include telehealth options, particularly for rural families; tiered service levels based on individual needs; and better coordination with schools and other community resources.

Fourth, federal and state governments must recognize that adequate healthcare funding is not optional spending but essential infrastructure. The planned $900 billion in Medicaid cuts will devastate services far beyond autism care, affecting millions of vulnerable Americans.

Conclusion: Our Moral Imperative

The Medicaid crisis facing autism services is more than a budget problem—it is a moral test of our nation’s character. As a society founded on principles of liberty and justice for all, we cannot accept solutions that sacrifice the well-being of vulnerable children for political expediency or fiscal austerity.

The children depending on ABA therapy are not line items on a spreadsheet; they are future citizens whose potential deserves nurturing. Their families are not seeking handouts but the support necessary to help their children thrive. Providers are not profiteers but dedicated professionals committed to making a difference.

We must demand better from our policymakers. We need solutions that combine fiscal responsibility with compassion, that address waste without punishing the innocent, that honor our constitutional commitment to promoting the general welfare. The current path of abrupt cuts and inadequate planning fails these tests spectacularly.

In the words of David Laxton of the Autism Society of North Carolina, “At some point, the math is not going to math.” But this isn’t just about math—it’s about morality. It’s about whether we will uphold our nation’s founding principles or betray them for temporary budgetary convenience. The choice we make will define who we are as a people and what kind of country we aspire to be.