In a letter to members of Congress outlining their guiding principles for how Medicaid should be changed in to order to address the challenges states are facing in sustaining their programs, Republican governors echoed earlier calls for block grants and more flexibility in how they run their programs along with repeal of the health care law. We thought it made sense to look closer at what the implications of these requests might be for states.
In terms of block grants, a couple of statements made by Cindy Mann, director of the Center for Medicaid and State Operations at CMS and Washington Governor Chris Gregoire sum up why block grants are not a solution to state budget woes (and to the contrary could exacerbate the situation).
I remain strongly opposed to any congressional effort to impose Medicaid as a block grant program in Washington. A growing and aging state population, economic downturns, natural disasters, new diseases or epidemics could each result in significant cost increases that the federal government could conveniently ignore, leaving state taxpayers to foot the bill–or putting our Medicaid enrollees at risk.”
– Governor Chris Gregoire, letter to the editor, Wall Street Journal, June 12
A block grant fundamentally, as I see it, takes away one of the key areas of flexibility that a state has, which is to be able to draw down federal dollars when its costs increase–whether its costs increase because of a downturn and there’s more people enrolling in the program or whether its costs increase because there’s some new technology, some new costs of … providing services to people,
-Cindy Mann, comments to the Medicaid Congress, June 13
Block grants give the states the flexibility to do what they please, but then leave them holding the bill when needs increase due to an economic downturn, natural disaster or higher than anticipated health care costs. If Medicaid had been operating as a block grant program during the current economic downturn, millions of children and others across the country may have not been able to get the health care they need because Medicaid programs could have been closed or benefits denied.
The Republican Governors stuck to their talking points and characterized the concept of block grants as a call for more flexibility when in reality it would limit their flexibility to respond to fluctuating needs. While they state that states are unable to uphold their end of the bargain with the stability protections (MoE provisions), it important to note that more than half of the states have now ended their legislative sessions without this repeal and have found a way to balance their budgets in other ways – by using rainy day funds, closing tax loopholes or by taking a hard look at the 5 percent of folks that account for 54 percent of all Medicaid expenditures and finding ways to bring those costs down.
Once gain, the impact of such a change couldn’t have been better said than in a letter from the National Association of Counties to leaders in Congress which makes clear this repeal is not cost cutting but cost shifting. It fails to address the cost drivers in health care and passes the buck to local communities, health care providers and families who are least able to afford it.
Because H.R. 1683 does nothing to improve the health status of these newly uninsured, we can expect that many of them will continue to seek care in our county hospitals, clinics and nursing homes and apply for other county funded and administered assistance programs. Without the support of Medicaid, counties will either have to turn them away or raise local property taxes. We believe this “flexibility” would damage our already fragile local health care safety net systems.
– Letter from Larry Naake, Executive Director, National Association of Counties, June 13
