Threats to Medicaid in Congress -- Block Grants and Per Capita Caps

Here is an action alert focused to protecting Medicaid. Block Grants and Per Capita Caps threaten to eliminate coverage of millions of people. The message below is from Access Living’s Amber Smock.

Today's (December 20, 2016) message will address one of the most critical issues people with disabilities have ever faced:
major federal threats to Medicaid. Last Friday, I shared an action alert from the Heartland Alliance to ask people to advocate in support of the Affordable Care Act (ACA, also known as Obamacare). Congressional Republican leaders are working right now, even through the holidays, to repeal the ACA. But did you know that they are also working to push through major cuts in Medicaid funding and enrollment?

Long email alert! But it's worth your time. Quick access to today's action page here .

There are four major threats to Medicaid that should concern disability advocates (and Medicaid advocates overall). The first two are connected with ACA repeal. They are elimination of Medicaid expansion, and elimination of Medicaid waiver options like the Community First Choice Option. The other two are changing federal Medicaid funding to a block grant, or to a per capita cap format. All of these would result in lack of access to Medicaid benefits for millions of people, and massive cuts in federal funding, which no state, much less our state of Illinois, can make up for with extra state funding. The second two problems are explained in more depth as follows.

What is a Medicaid Block Grant?

The federal government funds Medicaid programs that serve a number of different populations, such as low income families, older people, and people with disabilities. A block grant is a way to consolidate all the Medicaid programs that go to each state. Block grants are specifically intended to create cost savings because the amount would be less than projected growth for Medicaid in each state. States would have the ability to change eligibility and change benefit coverage. They could also make these changes faster because they would not have to get federal approval. And, federal requirements that disability advocates have fought for, such as the definition of community, would be gone.

What is a Per Capita Cap?

A Medicaid per capita cap is when the federal government would create a limit on how much to reimburse states for different types of Medicaid enrollees. The payment to each state would reflect changes in enrollment. They would increase only slightly each year. Again, to create federal savings, the per capita growth amounts would be set below the projected rates of growth. Again, states would have the ability to decide who was eligible for different types of services, and what benefits they could receive. And again, federal requirements could disappear.

Key Problems with Medicaid Block Grants and Per Capita Caps

1. Loss of coverage by Medicaid. As funds shrink and states change eligibility, millions could lose coverage. An analysis from the Urban Institute of an earlier block grant proposal from Speaker Ryan found that between 14 and 21 million people would eventually lose their Medicaid coverage with block grants (on top of those losing coverage if policymakers repeal the ACA and its Medicaid expansion). See this link .

2. Billions cut from Medicaid. Both block grant and per capita cap levels would be pegged BELOW the projected growth rate for Medicaid. Over time, funding will be cut more and more. As buying power decreases, serious budget cuts will kick in for a range of Medicaid programs; provider rates will be cut by as much as 30%.

3. States will gain full control over Medicaid eligibility and benefits. Lumping all the Medicaid programs into one block grant would give states authority to decide who is eligible for Medicaid and what benefits they will receive. There is a growing trend across the states to make it more difficult to qualify for Medicaid services, and to slash the benefits that do exist. This authority given to the states could be very bad for people with disabilities, especially those whose services cost more money.

4. Elimination of federal rules that have been put in place to protect people with disabilities. A good example is the CMS definition of community. This definition guides all Medicaid funding to home and community based services. Without this federal requirement, many states will lose a key driver for increasing HCBS as opposed to institutional services.

5. Lack of administrative capacity at state levels. State governments do not have the administrative infrastructure to suddenly take on running programs that had previously been administered by the federal government. This would be a capacity shock to states during which services to people with disabilities could be impacted.

While many of you may first think of home and community based services as a Medicaid program, remember that Medicaid also runs TANF, which is huge, and also pays for things like supported employment programs and children's health insurance. Changing Medicaid to a block grant or per capita cap format will negatively impact a wide range of people. The change would pit groups of people against each other as each group fights to get a bigger piece of the set amount of funds.

So, Let's Take Action!

It is really important that your members of Congress, our Governor, your state legislators, and two key agency directors that run Medicaid and insurance, hear from you asap. Here is a quick and easy link to send them a letter. They need to know about your concern about these possible changes ASAP, even though it is the holidays! Congressional leaders who want these cuts are working quickly.