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Medicaid, the biggest HIV insurance provider, is seriously vulnerable under President Trump’s administration

, by Emily Newman

insurance symbolMedicaid (Medi-Cal in California)—the largest public health insurance program in the U.S.—provides health care coverage to more than 40% of people living with HIV (nearly half a million people) in our country. Since 31 states opted to the expand Medicaid coverage through the Affordable Care Act in 2010, which allows participating states to cover all eligible people with incomes up to 138% of the poverty line, the program has become the single largest source of health coverage for people living with HIV.

This coverage may soon be vulnerable under President Donald Trump’s administration and the Republican–controlled Congress. Under the guise of “reform,” Republicans have proposed to “block grant” the Medicaid program in order to cut costs. Many experts are concerned because this federal cost-saving measure will ultimately lead to cuts in services or will force states reduce the number of people the program is able to serve. Because “block granting” may be an unfamiliar term for many, BETA shares below the basics on block granting—and how people living with HIV may feel the effects of this funding change.

First, what is a block grant?

A block grant, as explained by Families USA, is a fixed amount of money that the federal government gives to a state for a specific purpose.

Block granting Medicaid would mean the federal government would give each state a set amount of Medicaid funding each year. The amount of funding could either be set based on past Medicaid spending in the state or on the number of beneficiaries in the state. If the funding is based on a per-person calculation (with a maximum spending per person), it’s called a “per capita block grant.”

How is that different than how Medicaid is currently funded?

Right now, there’s no limit on how much the federal government will spend on Medicaid services in a particular state (states do share a percentage of the cost with the federal government, though) because as an entitlement program, it has to be available to all who qualify. A block grant puts a cap the amount the federal government will spend, by either capping the total funding provided to each state based on historical spending or putting a limit on how much it will pay for services per person enrolled in the program in each state.

Block grants are essentially a cost-saving measure—but one that has implications for people who benefit from the program. The Congressional Budget Office, as reported by Kaiser Health News, estimates that block granting Medicaid would reduce spending by as much as a third of the next ten years, and that “the cuts would start small, growing larger over the years.”

How might that change who or what’s covered under Medicaid?

Right now, because federal funding for Medicaid is open-ended, states are obligated to cover certain people and certain services.

“When a state spends money for Medicaid beneficiaries for covered services, the federal government automatically, and guaranteed, matches that payment,” explained Professor Timothy Westmoreland, from Georgetown University Law Center.

Block granting Medicaid will force states to make tough decisions about who they can afford to cover and for what services. If federal funding doesn’t go far enough to meet a state’s Medicaid costs—for instance if more people become eligible for Medicaid in a particular year, or if healthcare costs continue to rise—states may have no choice but to restrict access and services to cut costs.

“If the federal government is saving money, it’s because states are going to be left with expenses,” said Westmoreland. And if a state doesn’t have extra money for the Medicaid program, if the state isn’t going to pass new taxes itself, then the only thing they can do is cut back on services and the Medicaid program.”

From a states’ perspective, wrote Aaron E. Carroll in a New York Times article, it doesn’t make a difference if Medicaid payments come from a block grant or as a percentage of coverage (the way the system works now), “as long as the amount is enough.” But, “almost no block grant plan allows for this,” he concludes.

The opposition to block granting Medicaid

Experts and leading organizations have been vocal with concern and outrage over the plan to block grant Medicaid.

At a San Francisco AIDS Foundation community panel discussion, director of state and local affairs Courtney Mulhern-Pearson shared fears about proposals to block grant Medicaid. “Giving states a pot of money, and saying, ‘you figure out how to allocate the money,’—it may sound good at first, but if you look at what that means, we’d likely very quickly not be able to cover everyone that we now cover with those dollars. So then it would end up being a plan to cut Medicaid, and the cuts would get more severe as the years progress.”

“Block granting Medicaid is just another way to cut Medicaid,” said Ron Pollack, executive director of Families USA in a press release. “It is not a new or innovative idea. And it will severely undermine the program, cutting services, stripping coverage from millions and ultimately hurting the health of the children, seniors and people with disabilities who rely on the program… Block grants don’t do anything to foster innovation. States already have significant flexibility to innovate within the Medicaid program in order to improve health care quality and reduce costs. But there are certain basic services states must provide so no one falls through the cracks. Block grants could undermine that coverage and care guarantees, harming millions in the process.”

Read the full press release from Families USA.

Take action to defend affordable health care. Learn how you can get involved in the fight for the Affordable Care Act.

Read more about possible changes to the Affordable Care Act from the San Francisco AIDS Foundation policy team.

 

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