Medicaid Block Grants are Coming.
A proposal to block grant Medicaid will make the most vulnerable suffer unnecessarily.
Last Friday, the Senate confirmed Tom Price, representative from Georgia, to lead the Department of Health and Human Services.
Among Price’s more gruesome pastimes is regularly calling for Medicaid, a program that gives health insurance to those who cannot afford it, to be turned into a block grant. Right now, Medicaid is an entitlement administered by the states: the federal government sends money to the states to cover a set percentage of the costs of Medicaid, and states handle the day-to-day functioning of the insurance program. If costs go up, federal funding also increases.
Under block grants, the federal government sends a set amount of money to the states instead of a set percentage, and gives states greater license to administer their services as they see fit. The way Medicaid is set up now, states have to apply for a waiver in order to implement policies like drug testing for recipients or using Medicaid money to pay for private insurance. Many block grant proposals would allow states to go ahead with these ideas without applying for a waiver and without staying accountable to the federal government as they implement them.
Kellyanne Conway, Trump’s senior counsel, says block grants would revamp the program so that “those who are closest to the people in need are really administering it. You really cut out the fraud, waste and abuse.”
But we have been to this rodeo before. When safety net programs are changed from entitlements to block grants, they tend to get less funding, and the funding they do get goes less to their core objectives and more to fringe matters of doubtful effectiveness.
The case against block grants
The Center on Budget and Policy Priorities, for example, analyzed thirteen federal antipoverty programs that had been changed from entitlements to block grants. Since 2000, these programs have cumulatively received 37 percent less funding; indeed, the entire point of block grants is to drive down spending.
But the real worrisome piece of the block grant proposal is what the states would do with the remaining funding after being turned into a block grant.
Welfare reform offers a useful example. Back in the 1990s, the Republicans and the New Democrats decided to move cash welfare from an entitlement to a block grant. Before reform, passed in 1996, about 80 cents for every dollar spent nationally on Aid to Families with Dependent Children went to cash assistance to the poor. Today, only 51 cents per dollar goes to core objectives of the program. In South Carolina, only 16 cents.
The rest of the money goes to a dizzying array of programs, the efficacy of which an uncharitable person might question. Oklahoma, for example, funds a relationship class premised on the dubious theory of Love Styles.
MarketPlace’s Krissy Clark found that students in the class were mostly middle class and uniformly unaware that the class was funded through welfare. As poverty researchers Kathryn Edin and H. Luke Shaefer have written, federal aid for the needy “is now effectively a welfare system for states, not for the people.”
In the meantime, a smaller and smaller portion of poor families received assistance, down to less than a quarter nationally in 2014, and the number of Americans living in extreme poverty (officially defined as $2 per day) soared.
This is what we have to look forward to with Medicaid block grants.
Republicans now control 33 state legislatures and 33 governorships. They have unified government — governorship and both legislative chambers — in half the states. And in those states, they are already working to cut insurance coverage. A bill just passed in the Minnesota House that would free up insurers from the onerous requirement to cover maternity care, emergency services, hearing aids and 31 other basic needs.
Medicaid Should not be cut — it should be expanded.
The frank reality is that Medicaid does not need cutting; if anything, it should be expanded. Study after study has shown that Medicaid takes the sickest people, gives them life-saving coverage, and does it more effectively than private insurers. Medicaid is cheaper than private insurance and has costs that grow more slowly. States already have leeway in how they administer Medicaid. Here in my home state, California, Medicaid covers dental work and helps folks get and keep jobs.
Supporters of block grants point to Medicaid “waste, fraud and abuse” that are supposedly condemning our posterity to a lifetime of debt and immiseration. But if we are serious about reducing inefficiency in health care, there are bigger fish to fry than the relatively small amount of Medicaid fraud — $60 billion a year is the standard estimate. Private insurers, for example, cost us $375 billion a year on unnecessary paperwork alone.
Medicaid is an efficient, effective program. It is a small but clear declaration that America does not recognize poverty as a death sentence.
The good news is that there is dissent in the Republican ranks. Politico cites senators and governors who are worried about what Medicaid block grants would do to their insured population. Give your senator and representatives a call now to tell them to stop the Medicaid block grants.
Edited by Mike H and Kaleb Rogers
Call your Senators and House Representative now and tell them to stop the the Medicaid block grant.
It takes less than five minutes to call. Look up their numbers now and call them! Set a reminder on your phone to call back every day until Republican leadership agrees to health care for all Americans.