Building on their Thursday, January 30, 2020, their Medicaid Healthy Adult Opportunity waiver proposal, the Administration proposes cuts to Medicaid of $920 billion over the next ten years. The reductions are the result of various restrictions, new requirements (such as work), and various block grant options, as evidenced by January waiver notice to states.

Both that announcement and earlier efforts by CMS Administrator Seem Verma have encouraged states to use their waiver authority to allow a more limited Medicaid block grant. In the January announcement, it would be narrowed to adults who are not considered to be under mandatory coverage, meaning some children’s and disabled adult populations would not be included. States would choose between a fixed block grant total or “per capita cap” that would be a block grant based on individual calculations.

The Administration and some Republican members of Congress have been pushing Medicaid block grants in some form over the past several years. In 2017 the House of Representatives passed the American Health Care Act (AHCA) that converted the Medicaid program into a “per capita cap” block grant. Under the per capita cap, health care costs would be calculated for each of five groups: children, the elderly, disabled, adults on Medicaid due to the ACA, and all other adults. The base grant (in that bill FY 2016) would be adjusted by an inflation factor each year times the number of people in each category. That formula would result in each state eligible for a maximum amount of federal Medicaid dollars. If any state exceeded that federal amount in a year, the state would have to pay for anything above that cap—a block grant. CWLA opposed that proposal.

When CMS announced their new proposal last month, Congressman Joseph Kennedy III (D-MA) and Congressman Jim Cooper (D-TN) released a congressional letter signed by 35 members denouncing the CMS effort and pointing out it exceeds the legislative waiver authority. Congressman Kennedy will be speaking at the CWLA National Conference on Thursday, March 26.

About the Author:

John Sciamanna is CWLA's Vice President of Public Policy.

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