In April 2011, three national organizations released analyses on the consequences of converting the Medicaid program into block grants to states.

Their reports conclude that such a conversion would cause millions of low-income older adults and people with disabilities — as well as women, children, and families — to lose access to health coverage and long-term care services and supports.

More than 150 national organizations, including PHI, echoed this forewarning in a May 4 letter to Congress (pdf).

Ripping America’s Safety Net to Shreds

One report, “Medicaid Block Grants: Attacking the Safety Net for Low-Income Older Adults,” by the National Senior Citizens Law Center (NSCLC), provides examples of eight lawsuits the organization brought against states that curtailed or refused to provide Medicaid coverage to older adults who needed nursing home care and community-based long-term services and supports.

These cases — all won in court — are used to illustrate how “America’s safety net could be ripped to shreds” if the federal government’s role in Medicaid cost-sharing and rulemaking were changed.

“Proposals to block grant Medicaid, which is a shared federal/state program in which the federal government currently sets the rules and shares costs with the states, should set off alarm bells for low-income, older adults, their families and advocates,” the NSCLC report states.

“There is clear evidence that, given the opportunity, states will not provide an adequate safety net,” the report continues.

The NSCLC report states that if Medicaid is turned into a block grant, it could:

• Make it harder to qualify for Medicaid benefits.
• Threaten Medicaid coverage for long-term services and supports.
• Result in the loss of access to Medicaid-covered nursing home care.
• Eliminate the availability of essential services.
• Put consumers with both Medicare and Medicaid (dually eligible) at risk.
• Impoverish spouses of nursing home residents with Medicaid.
• Result in nursing home consumers losing protection.
• Make it difficult to get medical equipment and supplies covered by Medicaid.

Concurring Reports

An AARP fact sheet, “The High Cost of Capping Federal Medicaid Funding” (pdf), further illustrates that it would be a high price to pay if Medicaid block grants (or capped funding arrangements) were the means used to balance the federal budget and provide states with more flexibility.

“Millions of Americans could lose access to basic health services, including long-term services and supports,” AARP warns.

Additionally, an issue paper by the Kaiser Commission on Medicaid and the Uninsured, “Implications of a Federal Block Grant Program for Medicaid” (pdf), reports that converting the Medicaid program into a block grant represents a “fundamental change in the entitlement nature and financing structure of the program that would have major implications for beneficiaries, providers, states and localities.”

The Kaiser Commission paper explains that such a change “would probably require states to reduce payments to providers, curtail eligibility for Medicaid, provide less extensive coverage to beneficiaries, or pay more themselves than would be the case under current law.”

It concludes by saying that a Medicaid block grant would also put Medicaid expansion under health care reform at risk.

Simply Shifting Costs

In the letter to Congress (pdf), the 150+ national organizations urge Congress “to oppose proposals that arbitrarily cut Medicaid and shift a fiscal burden to the states.”

The groups explain that such measures do nothing to contain health care spending, but instead “simply shift the risk to states as health costs go up — and subsequently move the burden onto the shoulders of those who are least able to bear it.”

“Medicaid is a critical source of health coverage for many low-income direct-care workers (pdf) and also the primary payer for long-term services and supports,” said PHI Government Affairs Director Carol Regan. “The federal budget should not be balanced on the backs of low-income, older, and disabled Americans by turning Medicaid into a block grant.”

Medicaid accounts for 62 percent of spending for long-term services and supports (pdf), according to the National Health Policy Forum.

– by Deane Beebe