Pediatric healthcare units face closures and prior authorization gaps as states apply adult insurance rules to children
A study published in JAMA Pediatrics and subsequently cited in a January 2026 presidential brief from the Society of Critical Care Medicine found that nearly 30% of U.S. inpatient pediatric units closed over a 14-year period through 2022. State Medicaid programs have largely contracted children's coverage to private managed care organizations operating under regulatory frameworks originally designed for adults. Major insurer UnitedHealthcare recently announced plans to reduce its pediatric prior authorization requirements by nearly two-thirds.
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A JAMA Pediatrics study tracking hospital data through 2022 found that the United States lost nearly 30% of its inpatient pediatric units over 14 years, a figure cited again in a January 2026 presidential brief from the Society of Critical Care Medicine. The closures have coincided with a broader shift toward managed care in state Medicaid programs, which now cover the majority of children who rely on public insurance.
At the center of the coverage gap, according to the Washington Examiner op-ed by physician Eric Wargotz, is the application of prior authorization protocols built for adults to pediatric patients. Wargotz described a case in which an automated system denied immediate surgery for a teenager with a severe spinal deformity, instead requiring six weeks of physical therapy — a protocol he said is designed for adult lower-back conditions. He argued the core problem is structural: state regulators copied adult insurance rules when they drafted Medicaid managed care contracts, without adjusting for the distinct medical and developmental timelines of children.
Wargotz identified a financial mismatch as a driver of the problem. Adult insurance models, he wrote, are built around short-term budget cycles in which savings show up quickly on a balance sheet. Pediatric care — speech therapy, developmental screenings, early surgery — produces returns over decades, in the form of school readiness, physical function, and workforce health. He argued that applying a quarterly corporate logic to children's medicine treats those long-term investments as immediate expenses and discards their value.