Trump officials consider allowing Medicaid block grants for states

The Trump administration is considering moving forward with a major conservative change to Medicaid by allowing states to get block grants for the program, sources say.

Capping the amount of money that the federal government spends on the health insurance program for the poor through a block grant has long been a conservative goal. It was a controversial part of the ObamaCare repeal debate in 2017, with much of the public rallying against cuts to Medicaid.

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After the failure of that repeal effort, the Trump administration is now considering issuing guidance to states encouraging them to apply for caps on federal Medicaid spending in exchange for additional flexibility on how they run the program, according to people familiar with the discussions.

The administration’s discussions on the issue were first reported by Politico on Friday.

Any move toward allowing Medicaid block grants for states is sure to provoke an outcry from congressional Democrats, who now have the power to conduct additional oversight with their majority in the House.

Protect Our Care, a pro-ObamaCare group, sent out an email to reporters about the news with the headline “Here We Go Again: Trump Tries To End Medicaid As We Know It.”

There also could be questions about whether it is legal for the administration to make such changes without Congress.

The move would come through an existing waiver program that allows states to make changes to the Medicaid program, known as 1115 waivers, sources said.

Asked whether the move would be legal, Nick Bagley, a law professor at the University of Michigan, wrote: “The short answer is, I don’t know.”

“The waiver authority under section 1115 is broad, but it’s never been used for anything nearly as ambitious as block granting Medicaid,” he added. “The administration would certainly face lawsuits, and might run into the same sorts of legal problems that it’s encountered in approving work requirements.”

As Bagley noted, the administration has already moved to make conservative changes to Medicaid without congressional approval by allowing states to impose work requirements on Medicaid recipients.

“As the administrator has stated publicly, we believe strongly in the important role that states play in fostering innovation in program design and financing,” a spokesperson for the federal Centers for Medicare and Medicaid Services said when asked about the plans. “We also believe that only when states are held accountable to a defined budget — can the federal government finally end our practice of micromanaging every administrative process.”

“We invite states to bring forward their best ideas, and we will evaluate them to ensure their compliance with the goals of the program,” the spokesperson added.