You might think, given this history, that the Trump administration would cease proposing policy that threatens coverage; well, think again.
Mr. Trump’s Department of Health and Human Services has unveiled a proposal that would allow states to receive federal Medicaid funding as a block grant, annually adjustable for inflation, while implementing cost-cutting measures such as work requirements, asset tests, co-payments and prescription drug limitations. (As a sweetener, states would be allowed to pocket some of the budgetary savings.) Existing rules essentially require states to provide a set of services to all those who meet federally established criteria, and fund them on an open-ended basis.
To be sure, the administration’s proposal would not affect traditional Medicaid populations such as low-income pregnant women and people with disabilities. It targets only the so-called expansion population — the 17 million low-income adults who got Medicaid through Obamacare. And even then, it’s unlikely it will be adopted in blue states with large Medicaid populations, such as California, or in red states that never expanded Medicaid in the first place and probably won’t no matter how federal aid is structured, such as Texas.
Where it might make a difference is in red states that reluctantly expanded Medicaid but are looking for ways to scale it back, or in those 14 states that have not yet expanded but still want to do so in a limited way. An example of the latter category is Oklahoma, which is having a referendum on Medicaid expansion in November. That state’s Republican Gov. Kevin Stitt, who opposes the referendum, jumped at the administration’s offer. The proposal invokes — probably incorrectly — HHS’s statutory authority to adjust Medicaid’s core requirements, so its ultimate fate may depend on the courts. A federal judge in Washington blocked previous attempts by the agency to let New Hampshire, Kentucky and Arkansas set work requirements for Medicaid, which cost 18,000 people in the latter state their coverage, though the administration has appealed. (Kentucky has withdrawn its work requirements, which never took effect.)
Whatever its short-term practical impact, the administration’s latest block-grant proposal could be significant in the long run. The ultimate goal is to legitimize block-granting and the coverage reductions the approach almost certainly entails. Reduced coverage, it should be mentioned, was partly why Congress previously, and repeatedly, rejected Republican plans to block-grant Medicaid. The United States badly needs a system of universal coverage that delivers services more efficiently than the existing hodgepodge. In its determination to chip away at Obamacare’s compromise solution — Medicaid expansion — the Trump administration has revealed that it has other priorities.