In January, about 400 Kansas City kids are set to lose access to Children’s Mercy Hospital and its affiliated pediatric practices.

Emmalyn Case’s three children, ages 9, 6 and 4, will be among them.

“It’s really scary,” she said last week after hearing the news that the hospital would not be in the network of any Affordable Care Act health insurance plan next year.

Case said her kids have only needed occasional visits to specialists there, but their pediatrician — the doctor Case and her husband have trusted with their children’s health since birth — is at one of the Kansas City-area physician practices affiliated with Children’s Mercy. Losing that will be the biggest blow, she said.

“They’re healthy right now,” Case said of her kids, “but you never know what could happen.”

In reality, business calculations, not patient needs, determine which hospitals and doctors are included in various health insurance networks. 

Every year, every healthcare provider negotiates with the insurance carriers offering coverage in their market. And they have competing interests. Hospitals and other providers want to be reimbursed at rates that meet or come close to the cost of providing care, while insurance carriers want a discount. 

When they can’t come to an agreement, which seems to have happened this time, patients’ access to care can be the casualty.

“A lot of the issues around affordability are driven not by real factors, but more factors of contractual leverage,” said Wil Franklin, the CEO of KC Care, a safety-net health clinic. “This is a byproduct of how that just isn’t working.”

Lack of transparency

News about Children’s Mercy’s disappearing ACA insurance coverage ricocheted across Kansas City last week after one mom’s video went viral. 

In a tearful Instagram post, Kasey Jackson, who said her son is getting cancer treatments at Children’s Mercy for a second time, pleaded with the hospital to help.

“You have to stop this, Children’s Mercy,” Jackson said in the video. “You have to do something. You cannot let this happen.”

In a statement released last week, the hospital said insurance carriers providing coverage through the ACA marketplace in the Kansas City area had “chosen not to include Children’s Mercy as an in-network provider or have not been willing to cover the specialized pediatric care we provide.”

Meanwhile, the Missouri Insurance Coalition, a nonprofit trade group, issued a statement on behalf of the ACA insurance carriers saying that Children’s Mercy’s prices are simply too high. As a nonprofit hospital, the group said, the amount insurance companies reimburse it for services “should reflect the reasonable cost of providing care, not the absence of alternatives.”

“That responsibility carries extra weight where a single facility is the only realistic option for specialized care across a large region,” the statement said.

The truth about what kind of reimbursement rate Children’s Mercy can truly afford to accept and how reasonable the insurance carriers’ offers to hospitals were is unclear. 

It is widely understood that healthcare costs overall have continued to climb. And hospitals are seeing more uninsured patients who need free care, while federal and state assistance is going down.

Children’s Mercy, which reported operating income of $122 million in 2025, is in the midst of a major expansion, including a $1.7 billion building project on its downtown campus and a $152 million expansion of its Overland Park campus. Children’s Mercy is also growing  in communities farther away, including in Wichita and Springfield, as it works to build a market for the high-cost specialty services it offers. A spokeswoman said ACA plans in Wichita and Springfield are not affected.

Christopher Garmon, assistant professor of health administration at the University of Missouri-Kansas City, said last week’s public back and forth between Children’s Mercy and the insurance carriers isn’t unusual and may just be part of the negotiating process.

“For high-end hospitals, academic medical centers, children’s hospitals like Children’s Mercy, it’s common to see negotiations break down with a particular insurer,” he said. “When they can’t agree on rates, sometimes it comes out into the public view. … I don’t know what’s going on in the negotiations, but clearly there’s quite a big divide there.”

It would be unusual, he said, for the region’s only pediatric hospital to be left out of ACA insurance networks entirely.

To Tim Becks, an insurance broker in Westwood, the lack of transparency evident in the current ACA-Children’s Mercy tussle illustrates what is wrong with the health insurance system.

“There needs to be an overhaul of provider-insurance company relations,” he said. “That is something that health reform did not address.”

A better option?

The ACA marketplace was supposed to give Americans not covered by an employer plan and not eligible for Medicaid or Medicare an affordable way to buy health insurance. But almost from the start the marketplace has struggled to attract and retain insurance carriers.

From the hospital side, ACA plans often reimburse at a lower rate than commercial group plans, making them less attractive business partners. 

A 2022 survey by researchers at the University of Southern California Leonard D. Schaeffer Institute for Public Policy & Government Service found that marketplace plans paid 89% of what commercial group plans paid for inpatient and outpatient procedures.

The discrepancy may explain why 11 carriers have exited the ACA marketplace for 2027, either in some or all states. But the exodus is also likely driven in part by changes to federal policies, which may be making the ACA risk pool more expensive.

During the COVID pandemic and until the end of 2025, the federal government offered enhanced tax credits on marketplace plans, which made them much cheaper and more attractive to patients. That brought healthier people into the insurance risk pool, diluting the risk and lowering cost per patient. 

But those subsidies went away at the start of this year, leading enrollment to fall more than 20% this year. Presumably many of those who left were heather and cheaper to insure, which leaves the marketplace oversaturated with riskier and more expensive patients and makes it less attractive to insurance companies.

That may be part of what’s driving companies to leave the marketplace. And perhaps one reason none would take the risk on the high-cost specialty care that Children’s Mercy provides.

Last year only one ACA carrier, Medica, included Children’s Mercy in a plan. At the time, a spokesperson for the hospital told The Beacon that “most insurers have either chosen not to include Children’s Mercy or proposed reimbursement rates so far below market norms that sustainable participation would be impossible.”

Now, Medica said it is exiting the ACA market in Kansas and Kansas City-area counties on the Missouri side, leading to the current situation.

Carriers regularly exit the marketplace, including many of the biggest names. Aetna CVS Health, for example, dropped out last year, leaving patients in Missouri and Kansas with one less option for coverage. 

State regulators have little say over insurance plans sold through the federal ACA marketplace. Federal law requires the plans to meet certain standards, such as having an adequate number of providers in a network within a reasonable distance, but federal regulation related to this has been limited.

Families struggling to make it work

Children’s Mercy is the only pediatric hospital in Kansas and western Missouri, and it is affiliated with more than 30 pediatric primary care offices across the metropolitan area. If those aren’t included in ACA plans, people may have a hard time finding in-network care.

For Case and her family, ACA plans have gotten them through many years when they haven’t had access to an employer-sponsored insurance plan. Until recently, they owned their own business, and now Case’s husband is working in commercial real estate in a role that doesn’t come with health benefits.

They’ve had to adjust before when marketplace enrollment comes around, switching carriers more than once. But until now they’ve always managed to find one plan that covered the doctors they’ve needed.

Case said she’s lucky her kids are healthy. Unlike Jackson, whose video brought attention to the pediatric insurance coverage gap, they don’t need the specialty care that is only available nearby at Children’s Mercy.

But Case said she still wants that care to be available.

“I’m ignorantly, I guess, hoping that it’s going to work out and that good will win,” Case said, “and that Children’s Mercy will honor something through the marketplace.”

If that doesn’t happen, she’s not sure what she and her husband will do. They’ve talked about looking for a self-pay option or finding insurance outside the marketplace. But that would be a stretch for them financially right now.

“We are in a very financially scarce season of life,” Case said. “Even as it is right now, even insured through the marketplace, we still have to pay for stuff like vaccines and other things that are covered through better policies. But this policy is what we can afford, and so to think about paying even more than what we do now is — I just don’t know how we’re going to do it.”