Medicaid Block Grants Are Another Way to Cut Health Care

This statement can be attributed to Olivia Golden, executive director of the Center for Law and Social Policy (CLASP).

Washington, DC, January 30, 2020—Today, the U.S. Centers for Medicare and Medicaid Services (CMS) announced a new block grant proposal that will incentivize states to slash benefits for workers with low-incomes, limit drug coverage; cut payments to doctors, health centers, and hospitals; and bypass protections for patients. This new plan is just another bad proposal that would circumvent Congress and the regulatory process in order to undermine Medicaid. If implemented, the plan would worsen health, put state budgets at risk, and deepen the next recession. Years of policy experience have shown us that block grants do not work.

When capped federal dollars under a block grant fall short of meeting need, it is people with low incomes and state taxpayers who bear the burden. When the federal funding runs out, states eliminate benefits, lower eligibility thresholds, or enact other draconian cost containment policies to keep state spending in check. In Medicaid, it means that comprehensive health care would move further out of reach for many residents who have no other options for coverage. Residents would no longer be able to get the care they need or will forgo or delay needed services due to cost—leading to worse health care outcomes and a sicker state population.

Courts should block this illegal effort, and no state should take this toxic bargain.