Medicaid Block Grant Proposal Likely Has Little Impact In Florida

Jan 31, 2020
Originally published on January 31, 2020 7:18 am

A Trump administration proposal that would allow states to apply for Medicaid block grants likely won’t have much of an impact on Florida’s program, unless the state decides to expand Medicaid.

The Centers for Medicare and Medicaid Services announced the plan, called the Healthy Adult Opportunity, on Thursday. It’s an optional program that would allow states to receive part of their Medicaid funding in one lump sum. Unlike the current system where the federal contribution increases as a state’s health care costs go up, funding under the block grants would be capped. 

The grants would be limited to healthy adults under 65. States could not use them to cover care for children, pregnant women, nursing home residents or disabled people.

Since Florida didn’t expand Medicaid under the Affordable Care Act, it would have very few, if any, people within the eligible demographic. The state’s Agency for Health Care Administration was still evaluating the new plan and could not comment, a spokesman said.

It's unclear whether the announcement would make Medicaid expansion more palatable for Florida legislators. State leaders have previously supported block grants. In 2017, the Agency for Health Care Administration formally requested a waiver that would allow all of its Medicaid funding to flow to the state in one lump sum.

At the time, state leaders believed a block grant would provide them with more flexibility in how they spend federal Medicaid dollars.

In announcing the plan, CMS Administrator Seema Verma said it would help make the Medicaid program more financially sustainable and improve quality.

“The Healthy Adult Opportunity represents an innovative and historic approach to surmounting Medicaid’s structural challenges,” Verma said. “For the first time, it aligns financial incentives to improve quality of care and health outcomes for Medicaid adults by giving states unprecedented flexibility to administer and design its programs.”

The plan provides states who enroll with the flexibility to customize benefits and make adjustments to their Medicaid programs without permission from the federal government. States would be allowed to charge recipients premiums and put work requirements in place.  They would also have the ability to negotiate drug costs and limit which drugs are covered.

In exchange for the flexibility, eligible states would be held to increased accountability measures, including financial, quality and access metrics.

Some experts believe states that sign up for the plan would face lawsuits.

The American Medical Association released a statement on Thursday opposing caps on Medicaid funding that would increase the number of uninsured people and undermine the health care safety net.

“While encouraging flexibility, the AMA is mindful that expanding Medicaid has been a literal lifesaver for low-income patients,” the statement said. “We need to find ways to build on this success.”