Seema Verma, administrator of the Centers for Medicare and Medicaid Services, is urging states to adopt block grant funding for Medicaid. (Ron Sachs/CNP/Zuma Press/TNS)
Medicaid funding for people with disabilities could be jeopardized if a handful of states succeed in their efforts to overhaul how they receive federal dollars, advocates say.
At least three states, including Alaska, Tennessee and Utah, have indicated that they are interested in receiving block grants or per capita funding from the Centers for Medicare and Medicaid Services.
Currently, states receive matching funds from the federal government without a pre-set limit. If states depart from that approach, they would gain greater flexibility on how to spend the money in exchange for accepting a fixed amount, regardless of actual expenditures.
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But disability advocacy groups say they are concerned that such a shift would not provide adequate funding for people with disabilities who receive health care or home-and community-based services through Medicaid.
“These proposals often don’t think about the disability community — more people being moved into community services, more technology needs, more focus on person-centered plans — and the costs that go along with making those dramatic shifts,” said Esme Grewal, vice president of government relations at the American Network of Community Options and Resources, or ANCOR.
President Donald Trump’s budget proposal last month called for deep cuts to Medicaid and the establishment of block grant funding. In 2017, Congress failed to pass legislation that would implement block grants and now some advocates say the Trump administration may be circumventing lawmakers to accomplish that goal.
For instance, in Alaska, Gov. Michael Dunleavy wrote a March letter to Trump saying that CMS Administrator Seema Verma has urged Alaska to be the first state to receive Medicaid dollars as a block grant.
“We are eager to do this, but your support of her on this ‘first’ will keep the proper focus and speed on the application,” Dunleavy wrote.
In a statement, a CMS spokesperson said the agency does not comment on preliminary state discussions, but said states play an important role in fostering innovation in Medicaid program design and financing.
“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 statement said.
Neither Dunleavy’s office nor Alaska’s Medicaid program responded to requests for comment.
“It’s a clear red flag when you hear that they’re opening up these kinds of conversations,” said Julie Ward, deputy executive officer for public policy at The Arc. “They weren’t able to accomplish these things through Congress. They’re just pushing the levers that they have the most control over, which is how far can you push regulatory change.”
Earlier this month in Tennessee, the state House of Representatives passed a bill that would direct the governor to seek a waiver from CMS to receive an annual, unspecified lump sum for its Medicaid program, TennCare. A fiscal analysis of the bill found that the level of federal funding was unknown. Current annual federal funding for TennCare is $7.5 billion.
Before the vote, the bill’s sponsor Republican Rep. Timothy Hill said the measure would “return Tennessee tax dollars to our citizens, reduce the cost of compliance and serve more people with existing dollars.” He added that the goal of the legislation was not to “cut services or cut folks from TennCare.”
In Utah, the state has said it will seek a fixed amount per enrollee on federal contributions for its newly expanded Medicaid program in order to contain costs.
“The problem for us about this is we know not every person with a disability is accessing Medicaid through SSI or the disability pathways,” Ward said. “We know there are people out there with disabilities who are benefiting from the Medicaid expansion.”
Grewal of ANCOR said a move to block grants without congressional approval could result in lawsuits like what has happened in response to the Medicaid work requirement adopted by some states.
“We’re keeping an eye out and making sure people are informed,” Grewal said. “I think the message is for people to stay vigilant and make it really clear in their states how they feel about it in terms of disability services.”