The Trump administration took a big step forward today to let states convert a portion of Medicaid funding into block grants
to request budgeted federal payments to cover poor adults who enrolled through Obamacare’s Medicaid expansion in recent years. States who voluntarily cover adult populations outside of the Obamacare expansion could also receive capped funding.
Verma is touting block grants as a way for states to take greater accountability for the health of their residents while better controlling spending on the program, which takes up a chunk of state budgets. Verma also sees the policy as a way to constrain Obamacare’s expansion of Medicaid to millions of low-income adults — a program that she argues has siphoned away resources for the most vulnerable populations covered by Medicaid.
Still, Medicaid advocates are likely to challenge the policy in court. Democratic lawmakers have long cautioned the Trump administration against advancing the policy, contending the health department doesn’t have the authority to unilaterally cap program spending. In a letter to Verma this week, more than 30 House Democrats warned the move “defies Congress” and threatens care for some of the country’s most vulnerable people.
The health care law — and in particular its Medicaid expansion — remains popular after the failed effort to replace it during Trump's first year in office. Nearly three-quarters of states have expanded Medicaid since 2014, and support for the program has boosted Democratic candidates in conservative strongholds.
Block grants have been a regular feature in Republican health plans dating back to the 1980s. Republicans say that states can better manage the programs on a defined budget and fewer rules set by Washington. However, Medicaid advocates say a block grant would limit states’ ability to respond to economic downturns and expensive new drugs, forcing them to trim their programs.
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