[NYAPRS Enews] WSJ: Trump Administration to Soon Issue Guidance on Medicaid Block Grants

[Harvey Rosenthal]

NYAPRS Note: We are once again faced with the threat of submering and weakening the Medicaid program via block grant proposals. As the Center for American Progress recently noted that "these efforts to implement Medicaid block grants and per-capita caps using Section 1115 waivers would not only critically undermine the federal government's mandate to provide affordable health care for low-income, vulnerable populations, but they would also reduce overall funding for the program and shift Medicaid responsibility to the states. If state Medicaid costs were higher than expected due to increased enrollment as a result of economic shocks or natural disasters, states would be forced to either supplement their Medicaid program from other funding sources, increase taxes, or reduce services provided to enrollees. Alternate Medicaid funding plans do not account for economic volatility or sudden disease outbreaks. In such scenarios, Medicaid enrollment would outstrip projected funding rates, forcing states to bear the extra cost, which in turn would restrict program eligibility or reduce service quality.
Lawmakers have a responsibility to safeguard the Medicaid program from efforts to undermine it through harmful waivers and other administrative actions. For these reasons, it is time for Congress to publicly question Administrator Verma about her actions to bypass Congress."

Trump Administration to Soon Issue Guidance on Medicaid Block Grants
By Stephanie Armour  Wall Street Journal  January 19, 2020

The Trump administration plans to release guidance as soon as this month for granting states waivers to convert Medicaid funding to block grants, according to two people familiar with the matter, paving the way for a transformation of the 55-year-old program that is likely to reignite a partisan feud.
The impending release comes as a surprise after the Office of Management and Budget, which reviews regulatory actions, indicated in November that block-grant instructions had been withdrawn. Lawmakers and legal advisers speculated that the guidance may have been shelved or significantly delayed.

Approving state waivers to change Medicaid funding to block grants would be among the administration's most controversial moves to reshape Medicaid<https://www.wsj.com/articles/red-states-seek-to-remake-medicaid-11552654841?mod=article_inline>, a federal-state program that provides health coverage to one in five low-income Americans. Medicaid is the main source of long-term care coverage for Americans and is a guaranteed benefit, or entitlement, for eligible individuals.

Lawmakers in Tennessee, Alaska and Oklahoma have already expressed an interest in pursuing block grants. Supporters of block grants say the change would free states from federal requirements and give them more flexibility to try new ways to increase coverage and cut costs.

"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," Rep. Frank Pallone of New Jersey and Sen. Ron Wyden of Oregon, both Democrats, wrote in a Jan. 14 joint letter to the Health and Human Services inspector general.

Medicaid funding is open-ended, meaning the federal government matches state spending. If that funding is converted to a block grant, a state could get a limited, lump sum of federal money instead.

Consumer groups and Democrats say that limitation means thousands of people could lose Medicaid coverage or be unable to enroll if states' costs rise or enrollment swells. They also say it is illegal to waive the federal funding under Medicaid, suggesting any federal approval of state waivers to change to a block grant could wind up in the courts.

Seema Verma, the administrator at the Centers for Medicare and Medicaid Services, has said in previous speeches that the instructions would protect beneficiaries and include outcome accountability.

Medicaid block grants have long been an ambition of conservatives. States that get block grants likely wouldn't have to adhere to certain federal eligibility requirements or specific health-benefit services, for example.

Democrats have said a Trump administration move to approve block grants would circumvent Congress. A Republican push in 2017 to repeal the Affordable Care Act<https://www.wsj.com/articles/senate-poised-for-first-vote-in-obamacare-repeal-effort-1500996180?mod=article_inline> largely failed because analysts said proposals to convert Medicaid to block grants or a per-capita cap would raise the number of uninsured.

Congressional Democrats in March last year warned that granting waivers to states that wanted to change to Medicaid block grants would ignite a "firestorm."

Messrs. Pallone and Wyden in their letter urged the HHS inspector general to closely monitor the federal approach to the Tennessee request.
Tennessee's draft proposal unveiled last year<https://www.wsj.com/articles/tennessee-unveils-draft-plan-to-convert-medicaid-to-block-grants-11568732400?mod=article_inline> would give the state a lump sum, adjusted each year for inflation, based on projected costs. Federal funding would grow on a per-capita basis when enrollment exceeds the number used in calculating the initial grant, and Tennessee would keep any federal dollars that aren't spent if costs fall.

Sen. Lamar Alexander, a Tennessee Republican, last year said he welcomed the proposal and had supported ACA repeal-and-replace legislation that would have turned ACA funding into block grants to states.

Tennessee Republican Gov. Bill Lee has said savings from the plan could perhaps lead to more people being able to enroll in Medicaid.
Oklahoma Republican Gov. Kevin Stitt said in a November radio interview that the state should switch to Medicaid block grants. He is opposing a campaign to have a state ballot initiative in the 2020 election for expanding Medicaid.

Republican Alaska Gov. Michael Dunleavy's administration last year awarded a contract to study changing the state's Medicaid program to a block grant.

Consumer groups are especially concerned that states that didn't expand Medicaid, like Tennessee, will get approval for block-grant funding. Those people on Medicaid are the state's poorest and include many children. Any block grant, critics say, means the start of a major erosion in the nation's safety net.

"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," according to a letter last month to HHS from 18 patient groups, including the American Lung Association and March of Dimes (https://www.diabetes.org/newsroom/press-releases/2019/patient-groups-opposition-medicaid-block-grants).

https://www.msn.com/en-us/news/us/trump-administration-to-soon-issue-guidance-on-medicaid-block-grants/ar-BBZ7hC3

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