The Trump administration is readying guidance that could let states remodel their Medicaid programs to more closely resemble block grant proposals favored by Republicans during their failed effort to repeal the Affordable Care Act, according to people familiar with the discussions.
States would still have to adhere to certain requirements but could get far more leeway in how they design their programs, likely in exchange for some type of cap on federal funding, the people said. The guidance would lay out how states could satisfy federal requirements to get waivers to pursue the changes.
“We invite states to bring forward their best ideas, and we will evaluate them to ensure their compliance with the goals of the program,” the Centers for Medicare and Medicaid Services, which oversees the program, said in a statement.
Conservatives are expected to applaud the guidance as giving states more autonomy to try creative approaches in lowering Medicaid costs. But the Trump administration’s expected guidance will face opposition from consumer groups that fear it will lead states to reduce coverage, leaving more people uninsured.
“Whenever there has been an initiative to make cuts to Medicaid that didn’t get through Congress, there are other efforts to make cuts,” said Joan Alker, executive director of the Center for Children and Families at Georgetown University.
Medicaid is a program for the low income and disabled jointly funded by the federal government and the states. The federal government pays states a percentage of program costs.
States may be able to use waivers to get flexibility in exchange for an upper limit to that federal funding, for example. And while certain low-income groups would still have to be covered, states could try other approaches aimed at moving recipients out of Medicaid and into the individual insurance market.
CMS has been considering the guidance since the summer, health analysts said.
The guidance is the latest sign the Trump administration is assertively moving to target Medicaid as well as the Affordable Care Act following a midterm election where Democrats regained the House, in part because of a campaign to safeguard the health law and expand health care.
Already, CMS has said it would allow states to pursue waivers to change the way they implement the Obama-era health law. The agency has let states impose work requirements for the first time on Medicaid. And agency officials have been considering whether to approve state requests for a partial Medicaid expansion that would be more limited than envisioned under the ACA.
Medicaid block grants were a major goal of Republicans during the ACA repeal efforts in 2017 pushed at the time by Republican Sens. Lindsey Graham of South Carolina and Bill Cassidy of Louisiana. ACA repeal and replacement efforts stalled in part because of concerns that block grants and limits on federal funding would imperil coverage.
CMS officials said Friday that the agency is interested in spurring innovation in Medicaid.
“We also believe that only when states are held accountable to a defined budget can—the federal government finally end our practice of micromanaging every administrative process,” they said in a statement.