Trump Administration Rolls Out New Controversial Medicaid Block Grant Proposal. Allows States to Cap Certain Funding.

The President and his Centers for Medicare and Medicaid Services have issued letters to state Medicaid Directors outlining a controversial change in how parts of Medicaid are funded. The proposal would allow states to cap a portion of their spending on Medicaid. The changes appear to focus on Medicaid Expansion, a provision of Obamacare. North Dakota approved Medicaid Expansion in the 2013 Legislature. Hospitals and patients should take notice.

The proposed change to Medicaid comes one week after President Trump said he’s willing to look at potential cuts to Social Security and Medicare. Dubbed the “Healthy Adult Opportunity” as an attempt to avoid legal challenges, the purpose is the same as the controversial block grant proposals in years past. “The block grant plan, which invites states to request capped funding for poor adults covered by Obamacare’s Medicaid expansion, also would let states limit health benefits and drugs available to some patients.”

In 2017, Republicans attempted and failed to shift to block grant funding for Medicaid. The rushed Graham-Cassidy Obamacare replacement included a similar Medicaid provision but was ultimately rejected by the GOP-controlled Congress. Governor Doug Burgum, however, welcomed the Medicaid changes at a time North Dakota’s state finances were uncertain. At the time, and one day after Burgum wrote a letter in support, all 50 state Medicaid Directors – including North Dakota’s – warned about the block grant shift. It prompted me to ask whether Burgum even bothered to walk down the hall to ask his Medicaid Director about the proposal and how it would impact North Dakota patients.

If the current focus is on Medicaid Expansion, North Dakota hospitals must take notice. The surprise passage in 2013 was welcomed by patients, hospitals, and business leaders across the state. It has proven effective. Will the state step up for any potential federal funding gap if this block grant moves forward? As the lawsuit aiming to overturn all of Obamacare – including Medicaid Expansion – is bouncing around the courts, the administration appears to be unilaterally chipping away at the current law without congressional approval.

This is a developing story. Check back on NDxPlains.com for more information when it becomes available.