Trump Makes the States a Medicaid Offer They Must Refuse

Marc Stier |

Yesterday the Centers for Medicare & Medicaid Services (CMS) announced that it would encourage states to apply for waivers that would replace the current system of financing Medicaid with a block grant program that would cap federal Medicaid funding.

States like Pennsylvania must say no to this offer, which threatens a federal / state Medicaid program that works well, especially in our state.

Under the current system, states must implement the Medicaid program in a way that guarantees that individuals who meet certain income requirements get coverage for a set of medical problems. Some states cover a more limited number of medical problems. Others, like our state, cover more. But all must meet certain minimum federal requirements. And, together, the federal and state governments pay for the health care of everyone who meets the requirements set by the state.

The Trump plan is problematic in two ways. First, the current health services requirements of state Medicaid programs would be reduced. It would allow states to stop covering many low-income adults who first received health insurance under the Medicaid expansion. And many others—including children, people who qualify for the program based on disability, people needing long-term care, and individuals who are 65 and older and who need nursing home care—could be excluded from the program by the states.

The Trump offer would also allow states to cut benefits by deciding to exclude some prescription drugs from coverage, eliminating other Medicaid benefits such as nonemergency medical transportation and comprehensive preventive services, and adding new co-pays for Medicaid services.

It’s also dangerous for states in a second way. Accepting the Trump administration deal would cap federal funding for Medicaid expenses in each state. If costs increased in a particular year—either because of changes in the population or the spread of a virus or other medical crises—the states would be stuck with the bill. No more federal support for Medicaid would be forthcoming.

The Trump administration’s proposal is coming at a time when more and more evidence is available, including results from a recent randomized trial in this study, that Medicaid coverage for adults saves lives. There is also powerful evidence that the Medicaid expansion improves financial security for many Americans.

States do not have to accept the offer by CMS to take part in this program. We are confident that the Wolf administration will reject it. But we are concerned that the Republican-controlled General Assembly, which has pushed for cuts to Medicaid for a long time, will be tempted to embrace it and try to force the administration to do so.

Nothing, however, could delay the budget process (which begins next week) more than a fight over a Medicaid program that is both extremely well run and highly respected in the state.

This is an offer that all Pennsylvanians who care about the health and financial security of our citizens must refuse.