Block grants, by design, are intended to limit federal funding. Capping Medicaid
Medicaid
Medicaid in the United States is a federal and state program that helps with medical costs for some people with limited income and resources. Medicaid also offers benefits not normally covered by Medicare, including nursing home care and personal care services. The Health Insurance As…
What does new block grant guidance mean for the Medicaid program?
What Does New Block Grant Guidance Mean for the Medicaid Program? Yesterday the Trump administration issued sweeping new Medicaid waiver guidance, continuing its efforts to cap federal Medicaid funding. Caps were a prominent feature of the 2017 repeal-and-replace proposals and have been included in the president’s budget since.
What are Block Grants used for?
Grantees use the block grant programs for prevention, treatment, recovery support, and other services to supplement Medicaid, Medicare, and private insurance services. Specifically, block grant recipients use the awards for the following purposes:
Do Medicaid block grants help or hurt Kansas?
→ The ABCs of Medicaid Block Grants: The Brownback administration says block grants are essential. Critics say they would hurt Kansas Cato analyst Chris Edwards also concluded that Medicaid harms society at large by encouraging dependence on the government.
How are block grants calculated for States?
Under those, states also get a fixed amount of money each year, but that sum is calculated based on how many people are in the program. Since block grants aren’t based on individual enrollment each year, the state wouldn’t necessarily get more money to compensate if, say, more people qualified for Medicaid because of an economic downturn.
What is a block grant example?
Examples of Federal block grant programs are the Omnibus Crime Control and Safe Streets Act of 1968, the Housing and Community Development Act of 1974, and the grants to states for social services under title XX of the Social Security Act.
What is the purpose of a block grant?
Block grants provide state and local governments funding to assist them in addressing broad purposes, such as community development, social services, public health, or law enforcement, and generally provide them more control over the use of the funds than categorical grants.
What is the difference between an entitlement health insurance program and a block grant program?
Block grants are fixed pots of money that the federal government provides to states for benefits or services. This contrasts with an entitlement structure (which is what SNAP currently has), in which anyone who is eligible for benefits or services can receive them.
How are block grants funded?
Block grants are federal funds earmarked for specific state or local programs. A block grant is supported by federal funds but administered by state or local governments, the thought being local authorities are better suited to handle local issues. Such programs are often meant to improve social welfare programs.
What are the disadvantages of block grants?
Block grants' funding levels tend to fall short of meeting need, requiring benefit cuts, eligibility restrictions, or waiting lists. Funding levels are often inadequate initially and typically erode over time.
What is difference between a grant and block grant?
Block grants are distinct from discretionary grants because they generally allow for more autonomy and flexibility to the states to decide how to implement the program. States may use the block grant funding to establish a program or to make sub-awards to local organizations to provide the services within their region.
Are block grants automatic?
Block grants do not adapt and respond automatically to increased need.
Are block grants taxable?
A: Yes, all block grant payments to applicants are taxable income and are subject to 1099 reporting with the IRS.
How do block grants give power to the states?
Block grants are federal grants-in-aid that allow states considerable discretion (within broad limits) about how the funds will be spent. These give greater flexibility to state political actors to tailor programs to the state's particular needs than do categorical grants.
What does block funded mean?
Block funding and individual funding Government 'block' funding is the traditional funding model where the government provides grants to approved providers to deliver community service programs. The providers must meet a range of conditions and funding is usually linked to their client numbers and services delivered.
What are the 3 types of grants?
The three general types of federal grants to state and local governments are categorical grants, block grants, and general revenue sharing (see Table 1).
What is the biggest problem with federal block grants?
What is one of the biggest problems with federal block grants? There is a need for greater accountability in how the funds are actually spent by the states.
How do block grants give power to the states?
Block grants are federal grants-in-aid that allow states considerable discretion (within broad limits) about how the funds will be spent. These give greater flexibility to state political actors to tailor programs to the state's particular needs than do categorical grants.
What is the purpose of block grants or federal aid given to state or local governments quizlet?
Block grants are federal grants that are given for more general purposes for broad policy areas, such as welfare, public health, community development, or education. Federal mandates are demands on states to carry out certain policies as a condition of receiving grant money.
What does block funded mean?
Block funding and individual funding Government 'block' funding is the traditional funding model where the government provides grants to approved providers to deliver community service programs. The providers must meet a range of conditions and funding is usually linked to their client numbers and services delivered.
Which is a function of block grants quizlet?
Block Grants, generally favored by Republicans in Congress as they take power out of the federal government and give it to the states, are an easy way to implement programs or funds more locally instead of by a central government.
What is a block grant?
Block grants, by design, are intended to limit federal funding. Capping Medicaid with a block grant (a fixed amount of federal funding) may sound reasonable, but with limited federal funding, states could be forced to balance their budgets by dropping people from coverage and reducing mental health services. If a state is approved ...
Why is the federal block grant capped?
With a block grant, because the federal contribution is capped, states may choose to reduce the level of benefits, eliminate services, pay providers less, or restrict eligibility to balance their budget. Such changes can reduce access to care for people with mental illness.
When did the Medicaid program stop?
Over the past 40 years, Congress has repeatedly rejected efforts to block grant the Medicaid program — in 1981, 1995, 2004, and most recently in 2017.
Can you use a block grant for Medicaid?
Yet, in January 2020, CMS released guidance that would allow states the option to use a block grant to cover certain individuals within their Medicaid program — in particular, adults with low incomes who are not disabled or elderly.
Is Medicaid good for mental health?
Medicaid is critical to helping people with mental health conditions, providing health coverage to more than one in four adults with a serious mental illness . A new opportunity for states to apply for block grants in their Medicaid program could impact mental health benefits for many Americans.
How is medicaid funded?
How Medicaid is Currently Funded. The federal government and several states currently fund Medicaid jointly, with a guarantee to cover eligible individuals regardless of cost. The federal government pays a fixed percentage of these costs, which have been rising steadily over time.
What is the Tennessee Medicaid program?
In May 2019, Tennessee became the first state to pass legislation authorizing funding of its Medicaid program (TennCare) using “block grants” to replace the traditional funding mechanism.
How much of the federal government has been paying for the 2020 expansion?
The federal government has been paying 100% of the costs of expansion until 2020, when their share of the expansion dropped to 90%. Given this level of assistance from the federal government, it remains puzzling why all 50 states have not agreed to the expansion.
Why is the Medicaid cap delayed?
One reason for the delay was that in November of 2019, the Centers for Medicaid and Medicare Services (CMS) withdrew guidelines directing states regarding how to implement Medicaid block grants and per capita cap programs.
Is Medicaid a block grant?
The concept of Medicaid block grants has been a perennial talking point among fiscal conservatives since the Reagan administration . Political scientists in favor of federalism have long argued that one-size-fits all solutions are inefficient in a country as diverse as the United States. Tennessee, for example, has argued that the state routinely spends less on TennCare than the federal government projects they’ll need, and that block grants would reduce the incentive to overspend.
What is a block grant?
A block grant is a noncompetitive, formula grant mandated by the U.S. Congress. Eligible entities must submit an annual application to demonstrate statutory and regulatory compliance in order to receive the formula-based funding. SAMHSA is responsible for two block grant programs:
What is a grantee for mental health?
Grantees use the funds to provide comprehensive, community-based mental health services to adults with serious mental illnesses and to children with serious emotional disturbances and to monitor progress in implementing a comprehensive, community-based mental health system.
Overview of the Medicaid program
Medicaid is funded by both the federal government and states, guaranteeing coverage to all eligible adults and children regardless of total cost. Under this structure, the federal government pays a set percentage of all costs incurred by states in providing services to all eligible Medicaid enrollees.
Attempts to undermine Medicaid through block grants and caps
Congressional Republicans have consistently tried to alter the current Medicaid payment structure; two of their long-standing proposals have been to adopt a block grant and a per-capita cap structure.
Conclusion
These efforts to implement Medicaid block grants and per-capita caps using Section 1115 waivers would not only critically undermine the federal government’s mandate to provide affordable health care for low-income, vulnerable populations, but they would also reduce overall funding for the program and shift Medicaid responsibility to the states.
Endnotes
Jon Greenberg, “Long odds against repeal with Democrats running the House,” Politifact, January 7, 2019, available at https://www.politifact.com/truth-o-meter/promises/trumpometer/promise/1388/repeal-obamacare/.
Do you have to get prior CMS approval for managed care?
Under the guidance, states would no longer be required to get prior CMS approval of managed care rates, contract amendments, or fee-for-service provider payment rates. They also may depart from the regulatory standards that currently govern network adequacy and access to care. CMS monitoring after the fact could, however, result in a state having to revise their policies at a later time.
Does Medicaid have a cap?
Under Medicaid law, states and the federal government jointly finance the cost of the program; all program expenditures are shared without a cap. That means that when spending increases as a result of rising drug prices, newly available treatments, or an enrollment surge during an economic downturn, the federal contribution automatically adjusts.
Does Section 1115 waiver include funding caps?
The administration already has permitted most of these policies under section 1115 waivers that do not include funding caps, but some of the flexibility is new. For example, states could restrict their prescription drug formularies and stop providing wraparound benefits for expansion adults who are medically frail.
Can states apply for Medicaid block grants?
New guidance from the Trump administration allows states to apply for Medicaid block grants that place funding caps on the federal government’s contribution but allow states more flexibility. Under the Medicaid block-grant demonstrations, people’s coverage and access to care will be at risk. Yesterday the Trump administration issued sweeping new ...
How much will the Ryan budget cut Medicaid?
The so-called Ryan budget plan would make Medicaid a block grant and in the process reduce federal spending on the program by an estimated $771 billion between fiscal 2012 and 2021, according to the Congressional Budget Office. By fiscal 2030, federal Medicaid spending would be halved, according to CBO. Among other things, the plan would eliminate ...
Is Medicaid a block grant?
Cannon and Edwards said making Medicaid a block grant would save taxpayers in two ways: Less federal cost and state officials would have greater incentive to root out fraud and abuse. They also say it could help push more people into the private market for health care. The cons.
How Medicaid Is Currently Funded
What Are Medicaid Block Grants?
- Rather than paying a percentage of yearly costs, block grants would transfer a fixed amount of funding every year. The states would then be responsible for allocating those resources according to their needs. Tennessee’s offer to the federal government stipulated that if TennCare cost less than the block grant provided, Tennessee would be permitted...
The Case Against Block Grants
- Opponents of block grants, including the Center for American Progress, argue that Medicaid expansion has already substantially benefited patients, pointing to a study that demonstrated a 6% decrease in all-cause mortality, as well as reducing medical bankruptcies. There is also the fear that states will use the existence of block grants as an excuse to curtail services and raise t…
The Case For Block Grants
- The concept of Medicaid block grants has been a perennial talking point among fiscal conservatives since the Reagan administration. Political scientists in favor of federalism have long argued that one-size-fits all solutions are inefficient in a country as diverse as the United States. Tennessee, for example, has arguedthat the state routinely spends less on TennCare tha…
Effect on Home Care
- Analysts agree that the block grant concept is likely to encourage states to cut services. There is concern that home care services will appear like low-hanging fruit for state policy-makers, although some in Tennessee assert that the block grant will actually allow funds to be directed toward programs that Medicaid had not previously covered, including home-based care for resid…