Medicaid Block Grants are Cuts to Medicaid, Plain and Simple

Medicaid Block Grants are Cuts to Medicaid, Plain and Simple

Despite the clear ruling from the DC Circuit Court of Appeals that the purpose of the Medicaid statute is to provide health care, and the tremendous need for health care likely to result from the spread of COVID-19, the administration continues to roll out policies that cut essential health care and other safety net funding. A month ago, the Centers for Medicare and Medicaid Services (CMS) issued guidance encouraging states to apply for waivers to block grant Medicaid funding at the state level. The guidance applies primarily to Medicaid expansion programs, but block grants for all of states’ Medicaid funding likely will be close behind. Next, The President released a budget that seeks billions in radical cuts to our social safety net, including Medicaid. Meanwhile, CMS Administrator Seema Verma has continued to push block grants and to assert that they are in the interests of states and individuals, even going so far as to argue that block grants are not cuts to Medicaid and that anyone who opposes them is just fearmongering. With news cycles focusing on the upcoming election and the threat of a pandemic, it is easy to lose sight of the block grant danger, but we should not. The danger is real.

It is not fearmongering to say the restructuring Medicaid funding as a block grant is a threat to health care access for low-income people. Block grants for Medicaid hurt individuals, they hurt communities, and they will hurt whatever states request them.

For 50 years, the National Health Law Program has fought to protect and expand the health rights of low-income individuals and families across this nation — and we have a pretty good sense of when a proposal is likely to cut access to care or harm health. Block grants will undoubtedly do both.

Right now, everyone who is eligible for Medicaid is entitled to health care, with federal dollars matching state spending to provide that care. As the cost of delivering those services increases, federal matching funds are there to support the state’s spending. Health care costs do increase, and they will grow more rapidly than the inflation adjustment built into block grants. Costs increase for any number of uncontrollable and unforeseen reasons – an economic downturn leaves more people without employer-provided health care, a new drug offers a cure for a deadly disease, or there is an outbreak of a new epidemic.

Costs increase for any number of uncontrollable and unforeseen reasons – an economic downturn leaves more people without employer-provided health care, a new drug offers a cure for a deadly disease, or there is an outbreak of a new epidemic.

A block grant radically changes all of that. A state gets a finite pot of federal money, and when that money runs out, the state is on its own to find the funds to provide health care for its people or to cut enrollment or services to fit its budget. No sugar coating will change that reality. There are other dangerous things in the administration’s guidance, some more technical than others, but the point that anyone can understand is that block granting Medicaid is not about giving states more flexibility. It is about giving them less money to provide health services to the people who need those services most – and to destroy the Medicaid program as we know it.

The truth is Medicaid works and remains the best way to deliver quality health care to the 1 in 5 Americans who either work in low paying jobs without insurance or who have serious medical conditions that keep them from working. Restricting access, cutting benefits, and winnowing enrollment is a surefire way to ensure a sicker United States.

The administration continues its attack on health care, even after legislative and electoral defeats. It is now trying to use – more accurately, abuse – its executive authority to explode Medicaid.

The administration’s actions are even more upsetting when one looks at the evidence that Medicaid, in general, and the Medicaid expansion under the ACA, specifically, works. Study after study shows that expansion has led to a decrease in the uninsurance rate, increase in physical and mental well-being, and earlier diagnosis and treatment for illnesses such as cancer and diabetes. States that extended Medicaid have also seen a slower rate of rural hospital closures and a significant decrease in medical debt. The administration pays lip service to the opioid crisis, and yet is proposing to defund the health program that has helped thousands upon thousands of individuals get treatment.

But these health care gains are at risk. The administration’s actions will only make health care less accessible, and our communities sicker. Block grants are Medicaid cuts, plain and simple.

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