Advocates concerned about proposals to block grant Medicaid

Jan. 30--The threat to the health care safety net for the vulnerable comes not just from the planned rollback of the Affordable Care Act, advocates say, but from proposed changes to Medicaid.

Medicaid is one of the largest programs providing health insurance for children, the poor, the elderly and those with disabilities.

It's a lifeline for people like Trina Alford of Aliquippa, who cares for her 25-year-old daughter, Amary Cannon, who has cerebral palsy. Medicaid pays for bills for critical assistance, such as the aides who assist her daughter with daily living skills like eating, dressing and getting into her wheelchair.

As Ms. Alford ages, she said, she hopes it will someday pay for her daughter to live in a group home.

"That's an expense I would never, ever be able to cover," she said.

But advocates are worried about the long-term future of the program, as congressional Republican leaders have long discussed the idea of turning the program into a block grant that would be run by the states, rather than the joint federal-state program it is now.

"Right now, [this] is the No. 1 concern among disability advocates," said Nancy Murray, president of The Arc of Greater Pittsburgh at ACHIEVA, noting that Medicaid is the primary health insurance program for people with disabilities. "We are scared to death."

Almost two-thirds of Medicaid spending is for the elderly and people with disabilities, according to an analysis by the nonprofit Kaiser Family Foundation.

Medicaid is now run as a federal and state-funded program, with the federal government providing matching funds to states and requiring states to provide certain minimum benefits. As a so-called "entitlement" program, anyone who meets the guidelines can enroll, and states cannot close the program to those who are eligible.

"The current structure of the program is a matching program. The funds basically follow the needs," said Robin Rudowitz, associate director for the Program on Medicaid and the Uninsured at Kaiser.

If the program were turned into a block grant, states would likely get a set amount of money and end that entitlement guarantee.

Supporters of the block grant concept argue that it would provide greater flexibility to states, because states would deal with fewer federal rules and regulations, in addition to saving money.

Medicaid is one of the largest programs in Pennsylvania's budget. In fiscal year 2015-16, total reported Medicaid program expenditures (not including administrative costs) were $25.9 billion -- $15.2 billion in federal matching funds and $10.6 billion in state funds, according to the state's Department of Human Services.

Gov. Tom Wolf's office this month issued a statement saying he was opposed to turning the program into a block grant, because it would lead to cuts.

About 40 percent of children in Pennsylvania are insured through Medicaid and the Children's Health Insurance Program, the vast majority through Medicaid, said Joan Benso, CEO of Pennsylvania Partnerships for Children.

"What we worry about in a block grant is that kids will be pitted against very needy adult populations, such as seniors, such as the disabled, such as their own parents," she said.

"It's hard to say without seeing what the proposal is, but if it is a traditional block grant, it could have devastating consequences," said Ted Dallas, secretary of the Department of Human Services in Pennsylvania.

A set amount of federal funding for the state would inevitably reduce the number of people covered and "degrade the quality of coverage," as Pennsylvania's older population grows because of aging, and as health care costs grow, which would erode the value of the block grant over time.

Mr. Dallas added that the idea of transforming Medicaid into a block grant, although not new, did not receive a large amount of attention during the recent presidential campaign.

"There should be a pretty strong debate about this," he said.

"Under block grants, states could make income eligibility limits more stringent; establish waiting lists or cap enrollment; limit lifesaving benefits; or create administrative barriers to coverage that are not currently allowed, like unaffordable Medicaid premiums or work requirements for even the sickest recipients. In short, states would have incentives to be as stingy as possible to stretch block grant dollars further," according to a policy brief from Community Legal Services of Philadelphia, which opposes any effort to convert the Medicaid program to a block grant.

The welfare program was converted from an entitlement to a block grant under welfare overhaul in 1996, and many low-income advocates point to this experience as a cautionary tale.

Welfare was transformed -- from one program where any family poor enough to qualify was guaranteed assistance, no matter what state it lived in -- to essentially 50 programs administered by the states with set amounts of funds, so that not every person with a low enough income to qualify for assistance is guaranteed to receive it.

In Pennsylvania, as in most states, the number of families on welfare has fallen sharply, and barely moved during the Great Recession, when the number of people on other assistance programs, like food stamps and Medicaid, increased. Additionally, the value of the block grant has eroded over time, as it hasn't changed since 1996.

Kate Giammarise: [email protected] or 412-263-3909 or on Twitter @KateGiammarise.

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