President Donald Trump’s administration made explicit this weekend its commitment to an old GOP strategy for managing Medicaid, the federal-state insurance plan that covers low-income people — turning control of the program to states and capping what the federal government spends on it each year.
It’s called “block granting.” Right now, Medicaid, which was expanded under the 2010 health reform to insure more people, covers almost 75 million adults and children. Because it is an entitlement, everyone who qualifies is guaranteed coverage and states and the federal government combine funds to cover the costs. Conservatives have long argued the program would be more efficient if states got a lump sum from the federal government and then managed the program as they saw fit. But others say that would mean less funding for the program —eventually translating into greater challenges in getting care for low-income people.
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Healthcare advocacy groups say a bill in the Missouri Senate that seeks to transform Medicaid into a block grant program would cut necessary funding for healthcare services for Missouri’s most vulnerable citizens. But Republican supporters say it would give the state more flexibility and help it control runaway spending.
The same debate is playing out on a national stage. GOP lawmakers, including President Donald Trump, have embraced Medicaid block grants as a solution to growing costs. As Medicaid reform looks more and more like a potential reality, states are beginning to question if it’s wise to forgo some federal funding in exchange for more control.
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As the 115th Congress convenes and President-elect Trump prepares to take office tomorrow, our nation faces incredible challenges and opportunities. On health care in particular, the stakes couldn’t be higher, nor the path forward more clear. As leaders working on state-based policy solutions across the country, we have seen the impact of Obamacare on our communities up close. That’s why we’ve produced a report, being released today, on the need to unwind the law’s disastrous expansion of Medicaid.
Given the focus on the disastrous launch of the law’s insurance exchanges in 2013, many people don’t know that most of Obamacare’s coverage gains have come not through those exchanges, but through its new expansion of Medicaid to able-bodied, working-age adults.
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Medicaid has grown in size in recent years, with ObamaCare extending coverage to millions of low-income people who hadn’t qualified before. But Republicans warn of the program’s growing costs and have pushed to provide that money to states in the form of block grants — an idea President-elect Donald Trump endorsed during the campaign.
Vice President-elect Mike Pence signaled in an interview with ABC this month that the incoming administration planned to keep Medicare as it is, while looking at ways to change Medicaid.
“I think President-elect Trump made it very clear in the course of the campaign that, as president, we’re going to keep our promises in Social Security and Medicare,” Pence told ABC. “With regard to Medicaid, though, I will tell you, there’s a real opportunity, there’s a real opportunity as we repeal and replace ObamaCare to do exactly what the president-elect also said on the campaign, and that is block granting Medicaid back to the states.”
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Congressional Republicans are pressing Obama administration officials for details on the Affordable Care Act’s Medicaid expansion before they leave office next month.
Sen. Orrin Hatch (Utah) and Reps. Joe Pitts (Pa.) and Tim Murphy (Pa.) wrote to Centers for Medicare and Medicaid Services Acting Administrator Andy Slavitt Monday, asking how the agency ensures ineligible people aren’t enrolling in Medicaid. The members asked Slavitt to respond within 30 days of receiving the letter.
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Any Republican attempt to replace the Affordable Care Act must address Medicaid, which has literally become the 800-pound gorilla in the health-care policy room. Simply rolling back the ACA’s Medicaid expansion would spike the number of uninsured Americans and expose Congress and the Trump administration to withering criticism. On the other hand, leaving Medicaid unchanged exposes the federal budget to the program’s unsustainable cost trajectory: Federal Medicaid spending has doubled over the past decade.
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President-elect Donald Trump on Tuesday morning picked the founder and CEO of a health policy consulting firm, Seema Verma, to serve as Administrator of the Centers for Medicare and Medicaid Services.
“I am pleased to nominate Seema Verma to serve as Administrator of the Centers for Medicare and Medicaid Services,” said President-elect Trump in a statement. “She has decades of experience advising on Medicare and Medicaid policy and helping states navigate our complicated systems. Together, Chairman Price and Seema Verma are the dream team that will transform our healthcare system for the benefit of all Americans.”
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A new study by Jonathan Gruber, one of the ACA’s chief architects, suggests that roughly two-thirds of new Medicaid enrollees in 2014 were eligible for the program under previous state eligibility criteria—meaning that they were not made eligible by the ACA. Gruber’s results, combined with much higher than expected Medicaid enrollment and spending over the past three years, has profound implications for the distribution of program costs and the effect of a repeal of the ACA. This means that the federal government has likely paid billions more each year than the law allows for the expansion population while states have spent billions less. Additionally, Gruber’s results suggest that if the ACA were repealed, a lot fewer people would likely lose coverage than previously thought.
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On Donald Trump’s victory Republicans in Congress are primed for an ambitious agenda, and not a moment too soon. One immediate problem is ObamaCare’s expansion of Medicaid, which has seen enrollment at least twice as high as advertised.
Most of the insurance coverage gains from the law come from opening Medicaid eligibility beyond its original goal of helping the poor and disabled to include prime-age, able-bodied, childless adults. The Supreme Court made this expansion optional in 2012, and Governors claimed not joining would leave “free money” on the table because the feds would pick up 100% of the costs of new beneficiaries.
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States are beginning to turn to hospitals to cover the cost of Medicaid expansion once the federal match begins to drop next year. The Affordable Care Act provides 100% federal financing for those made newly eligible for Medicaid under the law. The federal match rate falls to 95% in 2017, 94% in 2018, 93% in 2019, and then 90% in 2020 and beyond. Starting next year, eight of the 32 states that have expanded Medicaid planned to use provider taxes or fees to fund all or part of the states’ share of costs, the report said. These states have chosen to implement a new or modify an existing provider assessment specifically for the purpose of covering the costs of expansion.
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