In its latest political ploy to undermine health care, the Trump administration has just released new guidance to states for block granting the Medicaid program. The guidance—ironically titled the “Healthy Adult Opportunity Initiative”—sets forth a framework for state 1115 demonstration waiver proposals to cap Medicaid spending. While the administration touts this effort as a cost-saving measure that will reduce spending, and allow for state flexibility in administering Medicaid, capping the program via block grants will serve to limit vital health care for the most vulnerable communities. These are the very communities that make up a disproportionate share of Medicaid’s enrollees. Block grant efforts could also stymie progress in addressing health disparities for low-income communities and communities of color.
Nationally, people of color make up the majority of Medicaid enrollees. The program has played a major role in ensuring health care coverage and access to health services for low-income Americans for decades. The program’s reach increased even more after the implementation of Medicaid expansion under the Affordable Care Act. Medicaid expansion has been instrumental in filling the coverage gap, helping instigate a 13.1 million-person enrollment increase, due to changes in eligibility as outlined in the health care law. This has translated into increases in uptake of preventive care, broader reach of family planning and pregnancy-related care, better access to low-cost prescription drugs, increases in life-saving medical screenings, and reductions in mortality rates. In fact, between 2014 and 2017, Medicaid expansion saved the lives of an estimated 19,200 adults. In addition to the associated health benefits yielded by Medicaid, the program also helps to support the economic well-being of the individuals and families it serves—allowing important cost savings for health care services and freeing up income for other expenses and household necessities. One in five Americans are covered by the Medicaid program. The Trump administration’s guidance to block grant it could derail all of this progress.
The Trump administration’s guidance sets states up to attain waivers to operate Medicaid with a fixed amount of funding from the federal government, also known as block grants. Block grant measures almost always lead to reductions in funding for programs, not increases. The guidance specifically targets Medicaid enrollees under the age of 65 who qualify on a basis other than disability or need for long-term care. These enrollees may not be eligible for coverage under a state plan. The guidance allows states to design Medicaid programs that offer reduced benefit packages under the guise of affording those states with maximum flexibility—clearly putting budgetary interests and political ideology before the health needs of the American people.
This guidance endangers the integrity of Medicaid and health care access for the millions of low-income people and people of color enrolled in the program. Specifically, it will:
- compromise the comprehensive coverage guarantee by allowing states to offer reduced health care benefits packages, including allowing changes to benefits, premiums, and copayments;
- reduce access to health care services by implementing a so-called aggregate cap financing structure, limiting health care cost per Medicaid enrollee in a respective state;
- instigate increases in poor health outcomes, leading to health disparities along economic and racial lines due to limited health care coverage, such as allowing states to implement a closed formulary and limited preventive care;
- induce stress and strain on health care personnel and local funding resources, because people who are sicker and grappling with more complex health conditions are entering the health care system through emergency care due to lack of access to comprehensive health services; and
- make it harder to respond to increased demand for Medicaid among vulnerable populations due to restrictions and limits on funding.
Legal experts have already called the guidance unlawful, and it will undoubtedly be contested in court. If implemented, block grants would go against Medicaid’s health care coverage guarantee for low-income Americans (which is established by statute), deny access to health services, and impose restrictions on the program. We have already seen previously approved state Medicaid waivers struck down.
Millions of people have gained health care coverage under the Affordable Care Act, and Medicaid has had an instrumental role in its success. Medicaid expansion has helped close the coverage gap significantly, covering a larger share of the low-income population and increasing health care access among people of color. Medicaid has been vital in reducing health disparities and poor health outcomes, and has been a contributor to improvements in economic security among vulnerable populations. Implementation of block grants to the program will only serve to harm those most in need of comprehensive health care and roll back monumental progress.