Back To ArticlesThe Trump Administration’s Latest Attempt to Cut Medicaid: Block Grants
On January 30th, the Trump Administration announced its latest attempt to undercut the Medicaid program and sabotage the Affordable Care Act. The Centers for Medicare and Medicaid Services (CMS) released guidelines for states on how to apply for special permission to set up Medicaid block grants.
PHAN strongly opposes Medicaid Block Grants and urges the Trump Administration to stay focused on solutions that increase access to affordable health coverage instead of undercutting the Affordable Care Act.
Pennsylvania’s Response to the Administration’s Medicaid Block Grants Proposal
Despite constant attempts to undermine Medicaid, people across Pennsylvania are strongly in favor of the program. Governor Wolf has recently announced his intention to veto any legislation that comes across his desk proposing a block grant system. Because of ongoing threats to the Medicaid program, however, supporters of Medicaid should continue to educate state and federal legislators on the benefits of the Medicaid program and why we should never entertain the idea of a block grant.
Who Will be Impacted?
This proposal would mainly impact the Medicaid expansion population, which includes close to 17 million people nationwide, and more than 700,000 Pennsylvanians.
How Block Grants Lead to Medicaid Cuts
Under current law, Medicaid operates using a state-federal partnership funding model, and the program pays whatever is necessary to provide appropriate medical care to people in the program. Implementing a block grant system would cap the amount of federal funding that can be spent on each enrollee. States would then have to make up for these deep federal cuts either by spending significantly more money out of their own state budgets or — more likely– by reducing benefits or the number in the program, leaving potentially millions of people without comprehensive health coverage.
Block grants also reduce a state’s ability to take care of people when unexpected health emergencies arise such as the opioid crisis or coronavirus. If states implement a block grant system, they will be unable to reach out to the federal government for more money and will be forced to leave people in the cold by kicking them off coverage or cutting critical services.
How Block Grants Increase Healthcare Costs for Everyone
When people lose their Medicaid coverage and become uninsured, they will still need to get medical care. Under a block grant system, these costs will now be passed on to everyone else in the form of higher insurance premiums and more unpaid trips to the Emergency Room. That does nothing to improve anyone’s health and means everyone pays a higher price.
Furthermore, if consumers’ health were to significantly worsen, they are more likely to rely on more costly forms of care, including hospitals, skilled nursing, and Long Term Services and Supports. Steady coverage is a key contributing factor to individuals maintaining their health and it prevents this slide, which could far exceed the costs of providing the benefits in the first place.