Tuesday, February 11, 2020

Why Obamacare Supporters Should Favor the Trump Administration's Medicaid Block Grant Proposal

Readers of this blog know that no one has been more critical of Obamacare's flaws––particularly over the impact the program has had on middle class consumers in the individual health insurance market.

And, readers already know that no one has been more supportive of the Medicaid expansion from the very beginning.

Now, the Trump administration wants to give states the option to abolish the open-ended federal funding of Medicaid via fixed block grants for only a small portion of those eligible, or potentially eligible.

Critics argue that by fixing these funds, particularly at a growth rate lower than paid in the past, will result in less money and if there is less money there will be fewer benefits and fewer people covered given the flexibility states would have to redefine the program.

That is a logical conclusion.

But it's a lot more complicated than that.

The Trump administration counters that the block grant option is "available to states for an important but limited population: working-age adults who are not eligible on the basis of a disability and for whom Medicaid coverage is optional — currently about 15 million people. The other 56 million beneficiaries would not be directly affected."

Block grant supporters point to skyrocketing state Medicaid budgets and believe that giving states the flexibility to innovate will eventually lead to a far more efficient and sustainable system. 

The Trump proposal would enable states to choose to accept either a single annual lump-sum payment, or a lump-sum payment based on the number of able-bodied adults in that state’s Medicaid program. The proposed block grant program would not apply to people traditionally eligible for Medicaid, such as children, pregnant women or people with disabilities.

It is also important to understand that the fourteen states, that have not expanded Medicaid for this target population under Obamacare, currently have some of the most draconian income limits to determine which of the able-bodied can qualify for Medicaid benefits:

Medicaid Income Eligibility as a Percentage of the Federal Poverty Level

The Obamacare Medicaid expansion made all those uninsured, able-bodied or not, and living on under 138% of the Federal Poverty Level (FPL)––which is $17,236 for a single person––eligible for coverage if their state chose to expand.

In Texas, a state that did not expand Medicaid, for example, an able-bodied parent can only be eligible for Medicaid if their individual income is below 17% of the FPL.

In 2020, the FPL for an individual is $12,490. In Texas that means an able-bodied single parent can't earn more than $2,123 annually to qualify for Medicaid.

In thirteen states that have not taken the Obamacare Medicaid expansion, an able-bodied individual with no children currently cannot qualify for Medicaid at any income level.

Wisconsin has its own hybrid Medicaid expansion for those earning up to 100% of the FPL, instead of the Obamacare expansion for people up to 138% of the FPL.

Lots of conservatives have said they could support a Medicaid expansion if they had block grant flexibility. Why not call them on that?

That begs the obvious question:
Would Medicaid supporters rather have millions of people without the benefit of the expansion in these fourteen states or create the real possibility many, if not all of these states, would eventually expand under the Trump block grant option?
I can't think of a question that better fits the old saying about people looking for the politics of the perfect over the politics of the possible.

In my mind, the people that are opposing the Trump administration's block grant proposals are letting their ideology stand in the way of millions of people becoming eligible for substantial, if not optimal, Medicaid benefits.

Earlier post:
Why don't the able-bodied just get a job instead of relying on Medicaid?
See:  Republican Health Care Reform: The Congressional Republicans' Irrational Opposition to Medicaid
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