Disability Advocates Wary of Proposed Medicaid Funding Changes

A recent push by the federal government to change Medicaid’s funding structure is raising concerns among disability rights advocates that the effort will slash funding for necessary services.

At present, Medicaid is a joint partnership between the federal and individual state governments, and the entitlement program is open-ended, meaning that it does not contain any pre-set funding limits.

Under a so-called block grant system, the focus of the new proposals, the federal government would instead allocate a set amount of money (block grants) to state Medicaid programs. In exchange, states would have greater flexibility in how they spend this money and thus, in theory, be able to more efficiently allocate resources.

But as disability rights advocates see it, block granting is inevitably a way for the federal government to shift more of the costs of the Medicaid program to state governments, many of which lack the resources or the political will to expend the money necessary to keep up with current Medicaid funding levels, let alone the expected increases in health care spending as the population ages.  

The concern among disability advocates is that by giving states more flexibility to design their own Medicaid programs, block granting will result in states balancing their budgets by cutting costly services, particularly for long-term care and related community services for people with disabilities. Cuts to such programs could result in people with disabilities being forced back into institutions, made homeless, or otherwise placed in settings unable to accommodate their needs.

Fifteen and a half million Americans with disabilities depended on Medicaid as a source of health insurance in 2009, including 9.5 million non-elderly people, according to the National Council on Disability.

Those with disabilities and their advocates have opposed various proposals to block-grant Medicaid for years. Paul Ryan, when he was chairman of House Appropriations Committee, released multiple budget proposals that would have transformed the nation’s Medicaid program into a system of block grants. The idea was also in play when Congress was debating the potential repeal of the Affordable Care Act in 2017.

In its annual budget, released in March, the Department of Health and Human Services (HHS)  proposed block granting Medicaid for all 50 states.

“[The proposal] would put the lives of people with disabilities at risk,” the Arc said in a statement in March. “The proposal includes deep cuts to Medicaid, the core program providing access to health care and home and community-based services for people with disabilities.”

With such a sweeping proposal unlikely to pass the Congress, HHS has been exploring the legality of granting individual states waivers allowing them to experiment with block grants.  

On May 2, the Tennessee Legislature approved a bill directing the state’s Medicaid agency to request such a waiver from HHS.  In March, Alaska’s governor wrote a letter to HHS urging the Trump administration to move forward with granting a waiver for block grants.

Too read a report from the National Council on Disability on Medicaid block grants and their potential impact on people with disabilities, click here.