Tricky trade-offs for states in Trump’s new Medicaid offer

Washington — The Trump administration Thursday offered states more control over Medicaid spending for some of their poorest residents, but first governors must accept a limit on how much the feds kick in.

That’s a potentially tricky deal for states facing rising costs in the federal-state health program for low-income people. Republican governors in Oklahoma and Arkansas welcomed the offer, but it’s unclear how many states will take it up.

With President Donald Trump already getting poor marks from the public for his handling of health care, the Medicaid plan is likely to provide more election-year talking points for Democrats. It dovetails with Trump administration efforts to restrain spending on other programs that help the poor, including food stamps and housing assistance.

Seema Verma, head of the Centers for Medicare and Medicaid Services, said the idea behind the administration’s “Healthy Adult Opportunity” is to improve the quality of care for the poor while controlling costs.

But the American Medical Association and a professional society representing cancer doctors warned against limits on Medicaid financing, and advocates for low-income people said the administration wants to weaken the social safety net.

Prominent Democratic lawmakers suggested Trump doesn’t have the legal authority to make states such an offer, and a public advocacy law firm said it’s weighing a lawsuit.

As unveiled by Verma, the complex block grant proposal would be a first step to changing a longstanding financial arrangement between Washington and the states. The federal share of Medicaid is now open-ended, meaning that a state is at least partly protected from unpleasant surprises like a new, $300,000 prescription drug or an economic downturn that swells enrollment.

Outlined in a letter from Verma to state Medicaid directors, the deal is optional for states. To get it, they’d have to apply for a federal waiver.

Its scope would be restricted to coverage for so-called “able-bodied” adults under 65.