Overreach on Medicaid

Block-grant approach would create spending caps

A Trump administration plan announced Thursday to effectively turn Medicaid into a block grant program is executive overreach that’s likely to cut costs at the expense of providing health coverage for needy Americans.

The new approach would invite states that wish to participate in its new waiver program to accept lower federal reimbursements and be allowed to spend less themselves, effectively capping spending. In exchange, the states would get more flexibility in how they run the program.

The plan is at odds with the structure Congress put in place for Medicaid: a program that matches state spending on health care for the poor and mandates that those who qualify receive the program’s benefits.

The expansion of Medicaid under Obamacare, which, like Medicaid itself, is a spending program authorized by legislation passed by Congress, has led to about one in five Americans being covered by the program. Pennsylvania’s expansion covered 700,000 people; expansion in neighboring Ohio covered 635,000 people, according to a 2018 state study conducted four years after the program was expanded.

The waivers the Trump administration is seeking to offer are meant to let states experiment with certain aspects of the Medicaid program. Federal law says such waivers must be used to expand coverage or improve the care beneficiaries receive.

Capping spending seems unlikely to do either.

The premise of the Trump administration’s new waivers is flawed both as a policy matter and as an exercise of executive power. If Medicaid needs the overhaul the new approach would usher in, the White House needs to take its plan to Congress and make it law.