Block granting Medicaid is still a terrible idea


May 28, 2019

Editor’s note: Suzanne Wikle is Project Director, Advancing Strategies for Aligning Programs (ASAP) at CLASP. This blog originally appeared on CLASP’s blog and is cross-posted with permission.


In its latest effort to reduce access to affordable health care, the federal Centers for Medicare and Medicaid Services (CMS) is reportedly working on guidance to pave the way for states to apply for waivers to block grant their Medicaid programs. Under a traditional block grant, states would receive a fixed, capped dollar amount of federal funding, whereas now they can draw down federal funds based on the program’s expenditures. State proposals in the works may take a less-traditional approach to block grants and propose strategies that effectively create a “back door” block grant by allowing states to cap enrollment. Any effort by CMS permitting states to block grant Medicaid is not only legally dubious, but also ill-informed policy that will only act as a cut to Medicaid.

Alaska is rumored to be one of the first states to request a block grant waiver, and this past week Tennessee’s legislature directed the governor to seek such a waiver. No matter which state is the first to officially request permission from CMS, any state pursuing such a change is ultimately seeking to cut its program and risk the lives of its residents. Block granting is also a short-sighted choice that puts a state’s budget at risk in the face of an epidemic or a new, expensive breakthrough drug.

Congressional attempts to block grant Medicaid have been defeated time and again because it’s well documented block grants are fiscally risky for states, lead to programmatic cuts, and prevent states from responding to economic downturns. The American public has been vocal in its support of maintaining and strengthening Medicaid. Should CMS approve these waivers, it would be enacting policy that failed to pass in Congress and is counter to public opinion.

While the promise of increased flexibility can sound enticing, the reality is that so-called flexibility pits funding choices against one another and ultimately leads to cuts. Medicaid already has the flexibility it needs to respond to economic downturns or public health crises, and capping funding for the program makes these responses more difficult.

Block grants have not worked in the Temporary Assistance for Needy Families (TANF) program. What we know from 20 years of experience with TANF is that funding has not increased with inflation or in response to poverty and need. Moreover, states have used TANF funds to support alternative programs and have significantly decreased the aid going directly to families. Despite assurances they would fund key supports like affordable child care, policymakers haven’t been able to deliver on their promises.

Advocates, hospitals, and providers have all been vocal about the harm block grants will cause. At the same time, a growing body of evidence continues to show that expanding Medicaid, as intended under the Affordable Care Act (ACA) has numerous benefits: improving the health of Black infants and reducing disparities with white infantsreducing deaths from heart disease, increasing cancer screenings, and improving treatment for people with opioid addiction. Policymakers should pay attention to the evidence and stop using the false narrative of “flexibility” as a cover for shrinking a successful program.

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