Medicaid Block Grants

What is a block grant?

The recent presidential election will no doubt bring some structural and detrimental changes to health care.  The talk about “repeal and replace” of the Affordable Care Act has been ongoing since its passage in 2010.  However, what is not as widely reported are the changes proposed for Medicaid.
Since the mid-90s, the idea of block granting the Medicaid program has been floated as an idea to curb costs of Medicaid.  Medicaid block grants change the program from an entitlement program to a fixed amount of money given to states to fund their programs.  This fixed amount of money allows states the flexibility to design the program the way they see fit with minimal Federal oversight.  This means that states will be responsible for ensuring this money lasts throughout the year, even in the event of a natural disaster, state or national recession or increase in medical costs.  If the federal money was exhausted before the end of the fiscal year, the state would have to pay 100 percent of additional costs – or terminate health care coverage for vulnerable seniors, children, or people with disabilities. A block grant would be based on today’s expenditures, at a time when Mississippi has made budget cuts to the Medicaid program.

What will this change mean for Mississippians?

Currently, Medicaid is an entitlement program that allows everyone who is eligible for the program apply for and receive benefits.  Under a block grant, state legislators, would have the ability to cap enrollment, eliminate services, impose premium payments, reduce provider payments and also eliminate who is considered eligible for the program in order to stay within their allotted budget .  Mississippi’s Medicaid program is already one of the most restrictive programs in the country.  Medicaid in Mississippi covers only the elderly, children, disabled and pregnant women, our most vulnerable populations.  Under a block grant the enrollment under any of these categories could be capped or categories of eligibility could be eliminated all together.

Block grants also do not increase to accommodate unforeseen events.  For example, when Hurricane Katrina devastated the Mississippi Gulf Coast in 2005, the Federal government allowed Medicaid waivers to temporarily cover low income survivors of the hurricane.  Also, in 2008 during the nation’s most severe recession since the 1930s, Congress passed a stimulus package that included increased funds for states’ Medicaid programs.  During the period of October 1, 2008 through December 31, 2010, Mississippi received an additional $790 million dollars to cover Mississippians whose jobs and incomes had been destroyed by the recession.  Both of these scenarios would not be covered under a block grant.
Finally, Medicaid is a literal budgetary lifeline for the state and local communities of Mississippi.  Mississippi has the highest Federal match of any Medicaid program in the country due to our extremely high levels of poverty.  For every $1 we send to the Federal government, we receive $3 back.  This fiscal year, Mississippi received $4.1 billion dollars from the Federal government for care of its citizens. This money not provides insurance for the most vulnerable of our state, it also funds hospitals and pays providers.  Without it, many hospitals, especially rural ones are at high risk of closure.  In rural communities, these hospitals are not only many times the sole source for care, but they also provide a significant share of the jobs.   Again, by moving to a block grant model, Mississippi can expect to get significantly less than this, which will be devastating to care for local communities.