Later this week, the Trump Administration will be rolling out their guidance to states on how to apply for Medicaid block grants:
NEW: Trump admin will announce its Medicaid block grants on Thursday at event billed “Transforming Medicaid: A New Opportunity for Better Health.”https://t.co/FYv5SpvZ2V pic.twitter.com/9v3WXkFffg
— Dan Diamond (@ddiamond) January 25, 2020
The first guarantee is that any state that files for a block grant will be generating an amazing number of billable hours for lawyers. Nick Bagley explains:
Setting aside the dubious policy merits of block grants, however, I don’t think the proposal is legal. I don’t even think it’s close.
Under section 1903 of the Medicaid statute, the federal government must pay a fixed “match rate” (known in the statutory lingo as “the Federal medical assistance percentage”) to every state that participates in Medicaid. In Tennessee, the match rate is 65.21%. That means that, for every $1 that Tennessee spends on its Medicaid program, the federal government kicks in about $2….
As Tennessee recognizes, it’ll need a waiver from HHS to make these changes. And section 1115 of the Medicaid statute does allow HHS to waive lots of the law’s restrictions in connection with experimental projects that are likely to assist in promoting Medicaid’s objectives.
Now, I’ve written before that I’m not at all sure that block granting Medicaid counts as an experiment that serves Medicaid’s purposes. But there’s a more fundamental problem with Tennessee’s proposal. You can’t use section 1115 to waive section 1903. To the contrary, section 1903 is pointedly omitted from the list of statutory provisions that HHS is empowered to waive.
But let’s put aside the legal gymnastics of storming that castle for a moment. Let’s think about what happens to a state that chooses to block grant when faced with a shock?
- Major hurricane that destroys a lot of public health infrastructure and creates a lot of sudden, unanticipated morbidity and mortality?
- New virus that is readily transmittable with significant symptoms and care needs?
- New drugs/treatments that have high first year costs but are massive net present value savers under any reasonable discount rate after five or ten years?
- A family of clutzy triplets who all have inhibitor resistant hemophilia moving across the state line ?
All of these are shocks to the payment system. All of them could readily increase first year costs significantly. Under the current system, the cost of a shock is split between the federal government and the state government. The cost of the shock is split 3:1 in Mississippi and 1:1 in Massachusetts for legacy Medicaid and 9:1 federal/state for expansion. The ratios differ as the federal government,which has the best capacity to eat risk and bad luck in the world, bears a good chunk of the risk.
Under a pure block grant, the federal government bears no risk of a shock. Instead that risk is shifted entirely to a state government whose risk bearing capacity is orders of magnitude less than the federal risk bearing capacity.
That is what a block grant will do when a state is faced with a shock.
Enhanced Voting Techniques
So as always, it’s the dumb thing to do the that’s why the Republicans want it.
BruceJ
Ooh, there’s even a catchy name for it… “Shock Doctrine”, or as one ex congressman put it “The Republican health care plan is ‘Hurry up and die'”
Always, always remember: the main goal of all GOP policy is cruelty.
Eolirin
The plan is that the shock won’t met by the state having to cover costs, it’ll be met by the medicaid recipients who are denied care once the money runs out (or the block grant is siphoned off) and by the hospitals who can’t receive reimbursement for ER visits. The only reason you do this is to destroy access to medicaid services.
Raven Onthill
“Someone, several someones, somewhere, has a vision of a purified American with women enslaved and without black or brown people, without weakness or illness.” – me, June 2017, on the Republican ACA “reform.” adviceunasked.blogspot.com/2017/06/the-cruelty-is-point-fascism-and-bcra.html
p.a.
Agree w the previous comments; the aim is to destroy the program. Note too: if block grants> shocks> $ cuts, coverage cuts, eliminations etc, this feeds into Rethug meme of government incompetence that many, especially low-info, voters, believe.
Duane
@p.a.: You said it. Typical Republican drown it in the bathtub mentality. Red states claim it’s not affordable, drop people from the program, suffering and death follow. Hopefully Anderson’s right and the courts put an end to this episode of Republican venality.
jonas
Funny how they never block-grant something like, say, a major military contract, so that if there are huge cost overruns the Pentagon is just like, “Oh, well. This is how much money there is and we can’t go over budget, so I guess we pull the plug here…” Only if it means kicking grandma out of the nursing home, or no longer covering little Johnny’s insulin. Belts gotta be tightened somewhere, amirite?
artem1s
Block grants are an open pathway for fundagelicals to deny women reproductive healthcare and shut down funding to Planned Parnethood. Ditto allowing government funding for conversion therapy and denying basic health care for LGBT. States rights and all.
jonas
As an illustration of why this is a bad idea, NY state — which has a relatively generous public safety net — runs its own Medicaid system along these lines, except at the county level. The state kicks in a fixed amount, and if costs rise, local governments and counties are expected to make up the difference. In rural upstate counties with declining/aging population and a fragile tax base, it becomes a huge liability. The only thing you can do is reduce services and restrict eligibility.
Which is precisely why Republicans love block granting. It’s a feature, not a bug.
gene108
@p.a.:
I don’t think the modern Republican voter cares about how well government works or what it does policy wise, otherwise Democrats would be winning a lot more.
Republicans seem to be driven mostly by spite against blacks, Hispanics, and the poor, who are disproportionately black, Hispanic, Native American, i.e. not-white.
Ruckus
I’d betting that anything that this maladministration wants or is even willing to talk about, is bad for the country as a whole. It might and that is pushing it, benefit someone somewhere, but it isn’t and won’t be about the positive structure, health, responsibility or humanity of the government.
As we all know, the depths the current conservative side of the aisle will go to, to destroy everything good or positive about government and turn it into an ATM for them raid on a constant basis, using everyone else’s accounts so it doesn’t cost them anything but makes them wealthier is their only goal. OK that and bigotry. And this has been the only conservative goals for government since ours was formed over 200 yrs ago.
Gary Ratner
Early in the first year of the Gingrich Congress, the Republican Governor of Michigan began trying to fabricate state-wide grass roots support for block grants that he would deploy in pre-cooked testimony to be delivered in Congress. The state Medicaid agency planned a series of all-stakeholders meetings, clearly geared toward producing a work product that more or less demanded block grants.
At the first meeting, however, the assembled stake-holders agreed by a large majority that any Michigan plan should include a state “maintenance of effort” mandate and a provision that Medicaid should remain an enforcebale “entitlement”.
After that, the Michigan Medicaid agency never bothered to convene the previously projected all-stakeholders meetings and the Republican governor never did testify about what the folks back home wanted.
joel hanes
@Eolirin:
The only reason you do this is to destroy access to medicaid services.
There’s a second reason: to allow health providers and pharma companies to make more money.
And Iowa has found a way for private insurance companies to skim on the Medicaid administration formerly administered (and more competently) by the state government.
Republicans are always in favor of private profit, even if the delivered goods/services/information are inferior to the products of competent government.
Ohio Mom
Hey David, are you available to answer a Cobra question?
David Anderson
@Ohio Mom: e-mail me at my Balloon-juice address.
Ohio Mom
Thanks very much!
Ohio Dad (also a David) will be emailing you shortly.
The issue is, in a nutshell, he lost his job last Wednesday. HR is saying he is covered for rest of January (whoppee, four more days) and can get COBRA coverage but will not receive the sign-up information for up to two weeks.
Supposedly the coverage is retroactive but we have too many medical conditions to take that risk.
Points to remember:
Ohio Son on Medicaid, so not part of our calculations.
I (Ohio Mom) turn 65 on March 13 and already have appointment with Medigap/Part D counselor to choose plans.
Ohio Dad turning 63 in March.
Maybe we should go with Obamacare instead of COBRA?
If we go with COBRA, can we trust any emergencies would actually be covered retroactively?
Again, many, many thanks!
joel hanes
@Ohio Mom:
I don’t know if this site is useful in your situation, or if it requires an affiliation with the employer. It’s what I used.
cobra.ehr.com/ESS/Home/login.aspx
David Anderson
@Ohio Mom: Mind if I write a response to this as a front page post as the timing/considerations are intriguing and useful.
Ohio Mom
Sorry for the delay — was getting supper started so it would be ready when Ohio Dad and Son come home in a few minutes.
While I was stirring stuff on the stove, i heard my phone make the “incoming email” sound and I took a quick glance at David’s letter to Ohio Dad. I couldn’t take the time to read it or I would risk burning supper, but I could see it was a LONG, detailed response and I started to cry. I am so grateful!
My sister tells me “People on the internet are not your friends,” but she is clearly visiting the wrong places.