Popular vote loser Donald Trump will propose restructuring Medicaid into a block grant program, says his staff, ending the guarantee of the program to low-income people. Kellyanne Conway, Trump’s White House counselor, said Sunday that this change will be a part of the regime’s healthcare plan, and that the move would ensure that "those who are closest to the people in need will be administering" the program.
Medicaid is an open-ended entitlement, paid for by both federal and state governments, covering more than 70 million people in the U.S. and more than half of the 20+ million who gained coverage through Obamacare. The "open-ended" part means that it is flexible. If something like an economic downturn means more people lose their jobs and become eligible, states can respond by getting more federal aid. Turning it into a block grant would cap that spending, giving a set chunk of money to the states.
That's where it gets thorny. How does the government figure out how much each state gets and when a state's eligible population changes, or medical costs increase to states how will the program adjust to meet those needs? That's what governors—Republican and Democratic alike—want to know, because Medicaid spending is generally the largest line item in state budgets.
"We are very concerned that a shift to block grants or per capita caps for Medicaid would remove flexibility from states as the result of reduced federal funding," Gov. Charlie Baker of Massachusetts, a Republican, said this month in a letter to congressional leaders. "States would most likely make decisions based mainly on fiscal reasons rather than the health care needs of vulnerable populations."
Gov. Robert Bentley of Alabama, a Republican, said that if a block grant reduced federal funds for the program, "states should be given the ability to reduce Medicaid benefits or enrollment, to impose premiums" or other cost-sharing requirements on beneficiaries, and to reduce Medicaid spending in other ways.
In Louisiana, Gov. John Bel Edwards, a Democrat, said he was troubled by the prospect of a block grant with deep cuts in federal funds. "Under such a scenario," he said, "flexibility would really mean flexibility to cut critical services for our most vulnerable populations, including poor children, people with disabilities and seniors in need of nursing home and home-based care."
Gov. John Hickenlooper (D-CO) says it will lead to governors having to make "impossible choices." "We should not be forced to choose between providing hard-working older Coloradans with blood pressure medication or children with their insulin." Not expanding Medicaid under Obamacare was one thing many Republican governors could live with, because it maintained a status quo—people who didn't have it would continue not to have it. But this is something that would affect all the governors and their budgets. It would force them to make those hard decisions about who lives and who dies. It's their political necks on the line.