Federal health program reforms: implications for child health care.

The "Omnibus Budget Reconciliation Act of 1981" included a number of provisions designed to reduce federal spending for health care and to increase state authority over health programs. Evidence concerning the financial condition and health care needs of children served by federally-financed health programs, and recent trends in coverage and eligibility, make it possible to assess the likely impact of the new legislation. One conclusion seems clear: extensive federal funding reductions cannot be accommodated by eliminating excesses. While reforms of the Medicaid program may be advisable for a number of reasons, a simple reduction to funding will have serious, adverse consequences for poor children.