The Trump administration appears ready to resurrect one of its most destructive plans for Medicaid, an idea it had floated but apparently rejected in November of last year to allow states to turn their Medicaid money into block grants. The Wall Street Journal reports that the administration is preparing to release a guidance later this month to change the open-ended money to states to a set block grant of funds.
Democratic Rep. Frank Pallone and Sen. Ron Wyden apparently got a heads-up about the move last week, writing in a Jan. 14 letter to the inspector general of the Department of Health and Human Services, "Regrettably, the Trump administration is encouraging states to apply for these illegal waivers in its ongoing effort to fundamentally alter and weaken Medicaid’s financing structure," the Journal reports. They asked the IG to monitor the administration's approach to a waiver request expected from Tennessee, which, along with Alaska and Oklahoma, is looking at the move. It would change Medicaid's funding from an open-ended as-needed matching program to a limited, lump-sum payment to states.
Once a state used that funding, that would be it: It wouldn’t be able to enroll more people in Medicaid, and perhaps could no longer cover services for the people already in the program. If there was a natural disaster big enough to throw thousands of people out of work (something like Hurricane Katrina, for example), Medicaid might not be able to cover them. Ditto if a state experienced an economic downturn and jobs were lost. Block grants are the fast track to destroying effective federal programs.
In a joint letter to HHS, patient advocacy groups addressed the threat to the health of millions. "The block grant will include vulnerable eligibility groups such as children and people with disabilities and requests unprecedented changes that could make it harder for patients to get the treatments and services that they need," they wrote.
The states would have more leeway, the administration argues, for how they spend the block-grant funding. Which is also an indirect threat to the health care of millions. There's little to prevent a corrupt state government from directing funds to quacks and cronies. The change is also going to end up in court, because it would not comply with the current Medicaid law.
