Medicaid block grants are a dangerous path toward coverage cuts

The federal Medicaid changes announced Thursday won’t affect anyone now enrolled in Alabama Medicaid. But they could put coverage at risk in the years ahead for hundreds of thousands of Alabamians. This is a worrisome step down a road to increased human suffering and greater financial strain for struggling families.

Guidance from the Centers for Medicare and Medicaid Services (CMS) would allow states to ask for federal permission (known as a waiver) to receive a block grant – a capped amount of federal Medicaid money – to cover working-age adults without disabilities under Medicaid expansion. In exchange, states would receive new powers that can be used to loosen Medicaid’s guaranteed patient protections.

The results could be devastating for newly covered adults who already struggle to make ends meet. For example, states could ask for a waiver to deny Medicaid coverage for certain prescription drugs. They also could seek to take coverage away from people who cannot afford to pay premiums or meet a stringent work requirement.

The waiver plan also could jeopardize state budgets. Under Medicaid’s current structure, the federal government shares all costs with states. But a block grant would leave states solely responsible for covering any costs above the capped amount. This would make it harder for Alabama to respond to health emergencies, natural disasters, economic downturns and other events that increase the need for health care.

A block grant is not a viable alternative to Medicaid expansion

In the 36 states that have adopted Medicaid expansion, it has brought significant gains in public health, family economic security and rural hospital stability. (Alabama is one of just 14 states that have failed to expand Medicaid to cover adults with low incomes.)

The CMS plan threatens these advances in important ways. First, it would weaken eligibility and coverage protections for patients, making their coverage more expensive and less comprehensive. And second, it would limit the federal funding that states can get to support health services. That would reduce the positive impact that expansion has on state economies.

All Alabamians deserve an opportunity at better health for our families, our workforce and our communities. Our state should reject capped funding and harmful barriers to care that would put our bare-bones Medicaid at further risk. Instead, our elected officials should move Alabama forward by adopting Medicaid expansion.