Trump Administration to Allow Medicaid Block Grants

January 30, 2020 by Dan McCue
FILE - In this March 22, 2017 file photo, Administrator of the Centers for Medicare and Medicaid Services Seema Verma listen at right as President Donald Trump speaks during a meeting in the Roosevelt Room of the White House in Washington. The Trump administration has a Medicaid deal for states: more control over health care spending on certain low-income residents if they agree to a limit on how much the feds kick in. It's unclear how many states would be interested in such a trade-off under a complex Medicaid block grant proposal unveiled Thursday by Seema Verma, head of the Centers for Medicare and Medicaid Services. (AP Photo/Evan Vucci, File)

WASHINGTON – States will now have the ability to convert part of their Medicaid funding into a block grant under a new program announced by the Centers for Medicare and Medicaid Services on Thursday.

According to Seema Verma, administrator of the Centers, the program is designed to give states “unprecedented tools” to design health coverage programs tailored to the unique needs of adult beneficiaries.

At the same time, Verma said, the program includes mechanisms to hold states accountable for results and maintaining strong protections for the most at-risk populations, including low-income adults, children, pregnant women, elderly adults, and people with disabilities.

Prior to the announcement, the Centers, which are part of the U.S. Dept. of Health and Human Services, sent a letter to state Medicaid directors explaining how they can implement the program.

In a press release distributed at the announcement, it states the new program “is designed to provide states with an opportunity to meet the needs of their adult beneficiaries under age 65 who aren’t eligible on the basis of a disability or their need for long-term care and for whom Medicaid coverage is optional for states.” 

“Vulnerable populations deserve better care. Data shows that barely half of adults on the Medicaid program report getting the care they need,” Verma said.

“This opportunity is designed to promote the program’s objectives while furthering its sustainability for current and future beneficiaries, and achieving better health outcomes by increasing the accountability for delivering results,” she continued. “We’ve built in strong protections for our most vulnerable beneficiaries, and included opportunities for states to earn savings that have to be reinvested in strengthening the program so that it can remain a lifeline for our most vulnerable.”

The administration says participating states will now have more negotiating power to manage drug costs by adopting a formulary similar to those provided in the commercial market, with special protections for individuals with HIV and behavioral health conditions.

The new program also allows states to waive requirements like retroactive coverage periods and allows them to engage beneficiaries through nominal premiums and cost-sharing.

States will also have the opportunity to customize the benefit package for those covered and make needed program adjustments. 

“This will be in real-time without lengthy federal bureaucratic negotiations or interference,” the administration said in its press release.

Following Thursday morning’s announcement, Verma held a stakeholder event to go into more detail on the new program. Among the participants were, Alex Azar, secretary of the Department of Health and Human Services, Oklahoma Gov. Kevin Stitt, and White House Domestic Policy Council director Joe Grogan.

Among the matters discussed were the financial metrics established under the program to ensure states “are driving affordability and quality.”

States participating in the program will be required to report real-time performance indicators to the Centers for detection of quality or access issues that need to be addressed.

Among those criticizing the block grant plan was House Speaker Nancy Pelosi who called it “the latest example of President Trump’s obsession with taking away Americans’ health care by any and all means.”

“After being stopped in the Congress from repealing the health care law and destroying the lifeline of Medicaid, the Trump Administration has decided to ignore the law and steal lifesaving health care from seniors and families anyway,” she said.

The speaker predicted the move will inspire states to cap and slash Medicaid with “ruinous consequences for rural hospitals, for families seeking opioid addiction treatment for their loved ones and for middle-class seniors with long-term care needs.”

“The Trump Administration would invite states to push Medicaid recipients off of lifesaving medicines, impose unaffordable premiums to maintain coverage and leave more vulnerable families exposed to catastrophic medical bills,” she continued.

Pelosi said Democrats would fight the block grant scheme in Congress “and in the courts” and rebuked the administration for “working to undermine protections for people with pre-existing conditions and to steal the promise of affordable, dependable health care” at every turn.

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