Worrisome Tremors: Trump Administration Works on State Route to Medicaid Block Grants

ANCOR has been increasingly finding more details about the Administration’s current efforts to bypass Congress to institute Medicaid block grants and is highlighting them here because such changes would fundamentally affect the way people with disabilities could access vital health and community supports since it would limit federal funding to states in exchange for more state flexibility. The Administration has long stated its interest in curbing Medicaid spending and devolving responsibility to the states. However, the shift of the House of Representatives to Democratic leadership following the 2018 election makes block grant legislation such as the 2017 Graham-Cassidy bill proposal unviable in Congress at this time. As such, we are seeing the Trump Administration working with states to test delivering Medicaid as a block grant through the Department of Health and Human Services (HHS), specifically its Centers for Medicare and Medicaid Services (CMS) agency. In this article, ANCOR recaps where these efforts are at and shares media forecasts of what efforts could emerge.

What we know now: Alaska is working on becoming a test case for Medicaid block grants. As mentioned in last week’s ANCOR Capitol Correspondence, the governor of Alaska confirmed the existence of discussions between states and the Administration on administering Medicaid as a block grant. In a letter to the President which since became public, Governor Mike Dunleavy referred to Administrator Seema Verma of CMS urging him to make his state a test case and shared his interest in doing so.

What Administration-watchers are expecting: According to Provider Magazine, in addition to the Alaska efforts underway “states, mainly in the South, could follow suit with waiver filings to block grant Medicaid funds once such a process started. The issue, however, is one that is expected to be drawn out considering the state-by-state nature of seeking Section 1115 waivers and the expected legal challenges in doing so, these sources say.” An article by the Wall Street Journal (pdf here)specifically identified the state of Tennessee as a potential implementor of Medicaid block grants, while an article by MedPage identified the state of Utah. Senator Casey (D-PA) has asked the Administration for more transparency on these efforts as part of his oversight role on the Senate Special Committee on Aging.

How Medicaid block grants fit into the big picture: The Administration’s other signature Medicaid reform attempt, able-bodied work requirements, has been frustrated by a federal court blocking waivers by the states of Kentucky and Arkansas which implemented the requirements.  While CMS approved seven other states’ work requirement waivers and is reviewing six other proposals, those states are all closely watching the Kentucky and Arkansas lawsuits to see what implications those could carry for their own waivers. The Administration has appealed both the Kentucky and Arkansas decisions. As the legal process unfolds on work requirements, this could create more political pressure for the Administration to seek a win by expanding its efforts to transform Medicaid through CMS and the states.

ANCOR will keep members informed of the evolution of these discussion and of whether there is a need for action.