What the Medicaid Block Grant Announcement Could Mean for People with Chronic Conditions

By Eric Gascho, Vice President, Policy & Government Affairs

The Centers for Medicare and Medicaid Services (CMS) recently released a controversial plan to allow states to implement block grants for their Medicaid programs, specifically, for adults that gained Medicaid coverage through the Affordable Care Act’s Medicaid expansion. The National Health Council (NHC) is alarmed by what this proposal will mean for people with chronic diseases and disabilities.

Rebranded as the “Health Adult Opportunity” program, guidance went out to state Medicaid Directors and was announced in a press release yesterday. CMS is using its demonstration and innovation function to offer states this option, skirting a typical notice and comment process to allow the general public to weigh in on the proposal.

Currently, states receive federal funding, approved by CMS, based on need and services delivered. Under this re-envisioned state grant program, states would be able to apply to restructure how they deliver their Medicaid benefits.

As proposed, states would receive a capped amount of funding. In exchange, states would get greater flexibility to reduce benefits, exclude coverage for certain drugs, and impose premiums and cost-sharing on people accessing Medicaid benefits.

Many people with chronic diseases and disabilities rely on Medicaid and its current design has benefits that have evolved to be as comprehensive as possible. The NHC is concerned that this proposal will significantly limit or eliminate access to health care.

Medicaid is the nation’s largest funder of long-term care and is often the only available option to cover services. The federal guarantee of services is a promise made by our nation. We, as a society, have promised that Medicaid will be there for anyone that qualifies, no matter what their health status is, or what their health care needs are.

With this block grant program states would have a significant incentive to reduce Medicaid spending to share in any federal savings and keep money not used under the cap. State budget realities would mean that they only way they can reduce spending is to  invest less money in services for Medicaid beneficiaries. The most likely response to these pressures is for states to take advantage of the proposal’s offered flexibilities in exchange for the cap – cutting benefits, excluding drugs, or charging enrollees.

Make no mistake – all of these options would result in less health care for people covered by Medicaid. The NHC is deeply concerned about the CMS block grant program and its potential to deny millions the health care they need. As a voice for the millions of Americans living with chronic diseases and disabilities, we will contact policymakers to share our concerns and propose alternatives.

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