The COVID-19 Pandemic is Exhibit A for Why Medicaid Block Grant Proposals Are Bad Policy
The coronavirus pandemic has already revealed some important lessons for us. One of the most important lessons for our country, and especially the state of Tennessee, is that our health care infrastructure matters. Public health measures, such as physical and social distancing, school and business closures, and stay-at-home orders, have been implemented in many cities and states. Despite the severe economic pressures, these measures are necessary because the alternative is far worse.
Without these measures, experts warn that hundreds of thousands, and potentially millions of people, may become infected with COVID-19. If the rate of infection becomes that high, our hospitals would be overwhelmed with more patients than they can handle, leading to a devastating number of deaths. In addition to deaths attributable to COVID-19, unrelated deaths would increase due to insufficient resources, equipment and medical staff to treat patients who need medical care for other conditions or injuries.
While the world takes drastic steps to avoid this potential outcome, Tennessee awaits the approval of its Medicaid block grant waiver proposal, which would severely cripple the state’s ability to quickly respond to public health emergencies through Medicaid. Meanwhile, in January of this year, the Trump administration and the Centers for Medicare and Medicaid Services (CMS) released their own dangerous guidance to states encouraging them to block grant their Medicaid programs.
Tennessee’s Section 1115 waiver application, which the state’s Medicaid agency called a “modified block grant,” proposes to cap the federal Medicaid dollars the state receives at a certain lump sum in exchange for purported “flexibilities” and the chance to split any “savings” with the federal government if the state is able to underspend the block grant amount. The Tennessee Justice Center led efforts to generate over 6,000 comments overwhelmingly opposed to the state’s block grant proposal. As the comments pointed out, if the proposal is granted, the state’s Medicaid program (known as TennCare) would be permitted to:
- deny care to patients with costly medical conditions by cutting prescription drug coverage;
- eliminate federal Medicaid rules that prohibit discrimination based on a patient’s diagnosis or medical conditions;
- remove protections for patients who have mental illness or substance use disorders; and
- “modify enrollment processes, service delivery system, and comparable program elements,” which could make it more difficult for people to apply for coverage and maintain it or get medical services.
During the comment period, many Tennesseans specifically cited unforeseeable events, such as epidemics and natural disasters, which could cause a surge in people needing Medicaid to provide them health coverage. As enrollment increases to meet higher demand during a crisis, the state must be able to rely on an increase in federal Medicaid dollars to help pay for additional costs of providing health care to more enrollees — and financially support hospitals. This ability would be constrained under any block grant proposal.
CMS’ block grant guidance to states similarly chips away at Medicaid’s foundation, putting the health and economic security of families at risk. With fewer dollars to provide care to millions of people, let alone address public health crises like COVID-19, CMS is opening the floodgates to allow states to cut benefits and limit services.
Tennessee is facing serious health care issues, including:
- the highest rate of rural hospital closures in the country;
- a substance use disorder crisis; and
- rising numbers of uninsured adults and children, including almost 300,000 Tennesseans who remain in the coverage gap because of the state’s refusal to expand Medicaid.
The situation was already dire. Then, on March 3, 2020, a series of tornadoes destroyed parts of Tennessee and killed 25 people – just days before the first coronavirus case was confirmed in the state. These unexpected events have put a strain on Tennessee’s health care system and on the economy, making access to Medicaid coverage for the uninsured and newly unemployed even more critical.
Experts agree that any block grant would not solve these problems, and instead would further weaken Tennessee’s health care infrastructure, making it more difficult to respond in times of crisis. In the wake of the coronavirus pandemic, Tennessee’s leaders must pay attention to the writing on the wall, withdraw the block grant proposal, and fully expand Medicaid without unnecessary red tape and restrictive barriers for consumers.
Kinika Young, Senior Director of Health Policy and Advocacy, Tennessee Justice Center