The danger of Medicaid block grants

With former House Budget Chairman Tom Price (R-Ga.), a long-time cheerleader for draconian Medicaid cuts, now running the U.S. Department of Health and Human Services, emboldened members of Congress are moving to replace federal Medicaid matching funds with “block grants.”

Block grants are transparently a means of saving the federal government money.  Yet we are to believe states are somehow being held back by the current system in which their own Medicaid spending is matched by the federal government through an income-based formula.  Instead, block grant proponents assert, things would be better if federal funding were frozen at its current level and simply disbursed to states to spend as they please.  Where is the accountability in that scheme?  Of block grants, Michigan Gov. Rick Snyder, a Republican, notes, “I wouldn’t give one to myself.”

{mosads}The effects would be particularly devastating upon long-term care in an aging society. Even with the current incentive of having their Medicaid spending matched, states, where budgets must be balanced, are doing a poor job of funding Medicaid care for those with chronic disabilities.  Not being ambulatory, and unable to show up to budget hearings, the long-term care population can seem especially invisible to state policymakers.

In New Hampshire, for example, the Medicaid payment rate for the skilled care provided by nursing homes has only gone up 7.2 percent over eight years.  This has created the nation’s third-worst nursing home care funding shortfall, even with the federal government matching the state’s payments dollar-for-dollar.  What would happen if that federal matching stopped?  Are we to believe care would improve in the nation’s second-oldest state?

At best, block grants would atrophy care; at worst they would cut it very dramatically. One House-passed proposal in 2012 would have cut Medicaid by 30 percent.  Historically, federal funding streams converted to block grants have seen huge declines; for instance, a 49 percent decrease for the Reagan-era Maternal and Child Health Block Grant, when adjusted for inflation and population. Medicaid block grants would exacerbate competition between vulnerable constituencies for scarce dollars, creating a sort of social Darwinism pitting kids with disabilities versus seniors, or home-and-community-based settings against nursing homes, when, in fact, the needs of all long-term care sectors deserve funding. Social justice cannot be measured by who is ablest to grab the conch shell. 

There is also ample reason to fear that Medicaid block grants would be followed by Medicare cuts. House Ways and Means Chairman Kevin Brady (R-Texas) – joined by Rep. Ron Kind (D-Wis.), chair of the so-called “New Democrat Coalition” – has previously introduced legislation to cut Medicare payments for nursing home care by as much as 8 percent. Equitable Medicare payments are the only thing keeping many skilled nursing facilities solvent, given that over-three-fifths of nursing home patients are on Medicaid.

Nothing about this past election signaled an appetite on the part of voters for cutting care for the elderly and those with disabilities. In New Hampshire, which elected a Republican governor, a post-election poll showed the vast majority of voters (76 percent) favored having the state fully-reimburse costs for long-term care, which is unlikely to ever occur, while a plurality (43 percent) even identified long-term care funding as their top priority – over public education.

Dating back to 1965, Medicaid-funded long-term care must not be collateral damage in the fervor to replace the Affordable Care Act.  Advocates can only hope that key legislators in the Medicaid debate, some of whom, like House Energy and Commerce Chairman Greg Walden (R-Ore.), herald from states with strong long-term care systems, work to protect our most vulnerable citizens and not subject them to a life-threatening social science experiment.

Brendan Williams is the president/CEO of the New Hampshire Health Care Association.

The views expressed by this author are their own and are not the views of The Hill.