Medicaid block grant proposal a cause for concern

With all the health care language proposed in the now possibly resurrected American Health Care Act from the Trump administration and its allies, it is easy to miss some basic ideas and tune out. One of these ideas is to “block grant” the Medicaid program. The significance could be easily missed.

Here is a simple comparison. If you were a high school senior and were offered, based on your academic performance, a tuition, room and board scholarship to college, would you rather take the scholarship or an offer to pay a specific amount, say $1,000 a year toward your college education?

Here is another comparison. If you are reaching retirement age would you rather be told that you will receive a specific dollar amount initially in Social Security with potential cost of living increases or told there will be a fund somewhere and someone will figure out an amount you will receive, if anything, based on that year’s federal budget? In both cases, the first amount is what would be considered an entitlement, a word that has in recent years been, in my opinion unfairly, categorized as negative in all cases. The second option is a “you will receive it if we feel like it and the funds happen to be available” option. Taxpayers who pay into the Social Security system every year they work within the system might be disturbed at the word entitlement.

Applying these ideas to Medicaid, there are certain categories of people who, if they fol-

low all the rules and meet the criteria, are supposed to receive certain benefits. The benefits for the poor in the community are nowhere near what is generally supposed but that could be a column for another day.

Focusing on just one group, elderly seniors in Medicaid-certified nursing homes, the block grant idea can be disturbing. Under the current system if your grandmother or parent or spouse needs serious care in skilled nursing – above basic care such as would be received in a personal care community but not acute care such as hospitalization – and that person’s assets and resources fall below a given amount while they are paying for care and they have not given dissipated their assets contrary to the rules to qualify for benefits and they dot all their “i’s and cross all their “t”s and have all the necessary documentation properly completed, they qualify to have their extended care covered by Medicaid. That, by the way, is a lot of “if’s. Benefits do not come automatically and it should be noted that the vast majority of people I encounter have paid their taxes all of their lives. Elderly and seriously disabled people reach a point where they can no longer afford to pay for their care on their own and the Medicaid program can be there for them. Medicaid residents of nursing homes also continue to pay when they are in a facility. Their monthly income, whether Social Security or pension, goes to the nursing home and Medicaid pays the difference.

Suppose Medicaid were different. Suppose the federal government merely gave whatever it felt like giving to states either by “block grant” or “per capita” in a given year’s budget. How would that work? This is what we do not know. Under a block grant system, the federal government would simply give the states a given amount either with or without specific conditions. Under a per capita system, it would give a given amount based on the number of people served. It is inescapable that this amount, even if it began at a reasonable figure, would be reduced over time. This would place more burden on the states to cut services or to raise taxes and the states are obligated to pass a budget that, at least on paper, balances.

What we do know is that now states are obligated to cover certain types of individuals and certain programs. Other individuals and other programs are at the option of the state. The requirements could end or be scaled back. Then what? No one knows.

Selling the “block grant” idea on the notion that it gives states “freedom to experiment” is a non-starter. States already have considerable flexibility under the Medicaid program and they contribute to the cost. “Freedom” reminds me of the old Janis Joplin tune, “freedom’s just another word for nothing left to lose.”

For more, listen to radio WCHE 1520 “Planning Ahead” Janet Colliton, Colliton Elder Law Associates with Phil McFadden, Home Instead Senior Care, on Wednesdays at 4 p.m.

Janet Colliton, Colliton Law Associates, PC, limits her practice to elder law, life care and special needs planning, Medicaid, estate planning and administration and guardianships and is located at 790 East Market St., Ste. 250, West Chester, PA 19382, 610436-6674, colliton@ collitonlaw.com. She is also, with Jeffrey Jones, CSA, co-founder of Life Transition Services.