The bill unveiled by the Senate leadership last week will cap the federal contribution to Medicaid, shifting large and ever-increasing costs to states and providers and children and families in perpetuity. That much is clear.

What is less well understood is that at the same time the bill transfers costs to the states, it transfers power to the Secretary of HHS. In other words, the more difficult it will be for states to meet the health and long-term care needs of their citizens, the less the Secretary will have to play by rules that treat all states and their children and families fairly. The Secretary will have unprecedented power to pick winners and losers.

Let’s take just one example. The cap on federal Medicaid payments would apply to almost all types of Medicaid spending. Under the most recent bill, one type of spending not subject to the cap is spending for a “public health emergency” (think Katrina or Zika or opioids, which the cap would otherwise not adjust for, leaving the states to absorb 100% of the costs).

But there’s a catch. In fact, there are several catches, all designed to give the Secretary maximum leverage over states with public health emergencies. First, the Secretary has to declare the emergency. Second, the Secretary has to decide that it’s “appropriate” to carve the state’s spending on the public health emergency out of the cap. Third, the Secretary has to decide how much the state will be allowed to carve out; there’s a maximum amount the Secretary can allow, but no minimum that the Secretary must allow.

The bill is chock full of other examples. Within a range, the Secretary gets to decide how much to dial down the per capita amounts of higher spending states, therefore lowering their cap.  Similarly, the Secretary has carte blanche to distribute $8 billion in payments to states to improve home and community-based services so long as he gives priority to the 15 states with the lowest population densities. And that’s just within Medicaid. The bill would also give the Secretary virtually complete discretion to allocate $132 billion in “Long-term State Stability and Innovation” allotments among states.

There’s nothing wrong with giving the Secretary discretion to administer a law. In fact, discretion is essential to enabling HHS, or any other Executive Branch agency, to make the programs work. The leading example in Medicaid is section 1115 of the Social Security Act, which allows the Secretary to waive Medicaid requirements to enable states to conduct demonstrations the Secretary thinks are likely to promote the objectives of the program. The negotiations that lead to waiver approvals typically involve state Medicaid agencies, Governors, state Congressional delegations, CMS, OMB, and the White House. There is no shortage of cooks in the waiver pot.

The difference in the public health emergency example—and in many more throughout the bill—is that there are no standards the Secretary has to follow other than the Secretary’s view of what is “appropriate.” This puts each state completely at the mercy of the Secretary (and CMS, OMB, and the White House). States (or providers) that are not viewed as “appropriate” will be at a particular disadvantage.

This is no way to run a railroad – much less the nation’s largest health insurer for children and families, people with disabilities and long term care.