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End Run Around Congress for Medicaid Block Grants?

The Trump administration reportedly is considering introducing Medicaid block grants through regulations rather than legislation, according to published reports.

Those reports explain that the administration may seek to offer states an opportunity to apply to the federal government to use Medicaid block grants by obtaining section 1115 Medicaid waivers, a commonly used tool for states seeking exemptions from federal legislative or regulatory requirements.

As reported by the online publication The Hill,

…the Trump administration is now considering issuing guidance to states encouraging them to apply for caps on federal Medicaid spending in exchange for additional flexibility on how they run the program, according to people familiar with the discussions.

Proposals to implement Medicaid block grants have arisen periodically over the past decade but have never gotten beyond the discussion stage because of how difficult it would probably be to gain congressional approval for such a program.  This latest proposal would seek to circumvent that problem by making Medicaid block grants optional for states and permitting those states interested in using them to apply for a Medicaid waiver from Centers for Medicaid & Medicaid Services to do so.

It is not clear whether such an approach would be legal.

NASH has long been skeptical about Medicaid block grants, concerned that the manner in which such block grants are implemented could impose artificial limits on state Medicaid spending that could be especially harmful during economic downturns when Medicaid enrollment typically rises and the demand for Medicaid-covered services falls especially heavily on private safety-net hospitals.  NASH’s advocacy agenda for 2019 addresses this very issue, explaining that

Block grants, whether based on individual states’ Medicaid enrollment or on their past Medicaid spending, could impose unreasonable limits on Medicaid spending that could potentially leave private safety-net hospitals unreimbursed for care they provide to legitimately eligible individuals. NASH will work to ensure that any new approach that involves Medicaid block grants continues to give states the ability to pay safety-net hospitals adequately for the essential services they provide to the low-income residents of the communities in which those hospitals are located.

Learn more about this latest proposal in The Hill article “Trump officials consider allowing Medicaid block grants for states.”