Beware of Block Grants: Along With ACA Defense, We Need to Protect Medicaid Too

Not even three full days into his presidency, Donald Trump is already showing he’s willing to put the health of millions of older adults, children, people with disabilities and low-income people at risk. This weekend, Kellyanne Conway, a top aide to President Trump, signaled the new administration’s desire to convert funding for the Medicaid program to block grants to states, with the assertion that doing so would mean “those closest to the people in need will be administering the program.” In reality though, block granting Medicaid would only ensure that those closest to the people in need will be faced with the difficult task of cutting eligible people from the program and eliminating important benefits as the total federal dollars they receive are drastically reduced.

The main objective of a Medicaid block grant is to slash federal spending on the program and shift costs to states. Period. Previous proposals to shift the Medicaid program to block grants or per capita caps would have cut federal spending by $1 TRILLION over 10 years. With such drastic reductions in funding, states will have no choice but to significantly cut their Medicaid programs. And there is no way to do this that won’t have terrible consequences for low-income and vulnerable people – exactly the people Medicaid is intended to serve. Eligibility reductions and cost-sharing increases will mean fewer people will have access to the coverage they rely on to manage chronic conditions and pay for lifesaving medications. Cuts to benefits will make it harder for children to access all the recommended preventive services they need to stay healthy and for older adults to receive the care they need to stay in their homes and communities and age with dignity. And cutting provider payments will mean fewer providers will accept Medicaid patients, making it difficult for low-income people, especially those in rural areas, to access the care they need.

But the hard decisions won’t be over after one round of cuts. Most block grant proposals don’t adjust for increases in medical costs over time and make it difficult for states to respond to new challenges and advancements in vital areas of medical care. This means states won’t have the funding necessary to effectively combat a new epidemic, such as Zika, and if they decide to cover a new drug or treatment, they may have to slash eligibility even further.

So don’t be fooled by Conway’s talk of flexibility and returning control to states. Block grants would do only one thing when it comes to Medicaid – cut federal spending at the expense of state budgets and the health of low-income Americans.

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