With just a dozen days left power, the Trump government on Friday accepted a radically different Medicaid funding system in Tennessee that for the first time would provide the nation wider authority in running the health insurance plan for the poor in trade for capping its annual national funding.
The acceptance is a 10-year”experiment.” Rather than the open-ended national financing that rises with higher registration and health costs, Tennessee will instead get an annual block grant. The strategy has been pushed for decades by conservatives who state countries too often chafe under strict federal rules about registration and policy and can figure out ways to provide care better.
But under the arrangement, Tennessee’s yearly funding cap will increase if enrollment grows. What is different is that unlike other states, federal Medicaid financing in Tennessee won’t automatically keep up with rising per -person Medicaid expenses.
The approval, however, faces an uncertain future since the incoming Biden administration is very likely to oppose such a movement. However, to unravel it, officials could have to set up a review that includes a public hearing.
Meanwhile, the changes in Tennessee will require weeks to implement because they want ultimate legislative approval, and state officials must negotiate quality of care targets with the administration.
TennCare, the state’s Medicaid program, said the block grant system will give it unprecedented flexibility to decide who’s insured and what services it will cover.
Under the arrangement, TennCare will have a specified spending cap based on historic spending, inflation and predicted future enrollment changes. If the state can run the program in a lower cost compared to cap and maintain or improve quality, the state then shares in the savings.
Trump administration officials said the strategy adds incentive for the state to save cash, unlike the present system, where increased state spending is matched with greater federal dollars. If Medicaid enrollment grows, the state can secure additional national funding. If enrollment drops, it is going to get less money.
“This groundbreaking waiver puts guardrails in place to ensure appropriate oversight and protections for beneficiaries, while also creating incentives for states to manage costs while holding them accountable for improving access, quality and health outcomes,” said Seema Verma, administrator of the Centers for Medicare & Medicaid Services. “It’s no exaggeration to say that this carefully crafted demonstration could be a national model moving forward.”
Opponents, such as most urges for low-income Americans, state the approach will endanger good care of the 1.4 million people in TennCare, that include children, pregnant women and the handicapped. Federal financing covers two-thirds of the price of the program.
Michele Johnson, executive director of the Tennessee Justice Center, said the block grant approval is a step backward to the nation’s Medicaid program.
“No other state has sought a block grant, and for good reason. It gives state officials a blank check and creates financial incentives to cut health care to vulnerable families,” she explained.
The agreement differs from traditional block grants championed by conservatives since it allows Tennessee to get more federal funding to keep up with enrollment growth. In addition, while the state is provided flexibility to boost gains, it can’t cut them by itself.
Democrats have fought block grant Medicaid tips because the Reagan administration and most recently in 2018 as a part of Republicans’ failed effort to repeal and replace major parts of the Affordable Care Act. Even some key Republicans opposed the idea because it would cut billions in funding to states, making it harder to help the poor.
Implementing block grants via an executive branch action rather than getting Congress to amend Medicaid law is also likely to be met with court challenges.
“This is an illegal move that may threaten access to health care for vulnerable individuals in the middle of a pandemic,” Rep. Frank Pallone (D-N.J.), chair of the House Energy and Commerce Committee, posted on his Twitter account. “I’m optimistic the Biden Administration will move fast to rollback this harmful policy when possible.”
The block grant approval comes as Medicaid enrollment is at its highest-ever level.
More than 76 million Americans are covered by the state-federal health program, a million more than when the Trump administration took charge in 2017. Enrollment has jumped by more than 5 million in the past year as the economy slumped with the pandemic.
Medicaid, part of President Lyndon B. Johnson’s “Great Societ