The Trump administration’s new attempt to gut Medicaid

That’s the headline of a new op-ed of mine at the Washington Post about the letter from the Trump administration inviting states to adopt quasi-block grants for their Medicaid programs. Here’s an excerpt:

Undeterred by public sentiment, the Trump administration is trying to achieve through executive action what it couldn’t get done in Congress. But while its authority to waive Medicaid rules is broad, it is not unlimited. In particular, the Trump administration doesn’t have the power to waive the section of the Medicaid law that fixes the relative contributions of the federal and state governments.

Changing their relative contributions, however, is exactly what the Trump administration means to do. No longer would a state get $9 for every $1 it spends on the expansion population, for example. Instead, if a state exceeds its annual cap, federal payments would cease and the state’s share of Medicaid spending would increase. On the other hand, if a state keeps its expenditures down and retains some of the savings, the federal government would pick up a larger share of the tab.

Either way, the waivers would make an end run around Congress’s prohibition on changing how Medicaid is paid for. Litigation is inevitable, and the courts have so far displayed little patience with the administration’s stretching of its waiver authority. A federal judge, for example, has already struck down waivers allowing Arkansas, Kentucky and New Hampshire to kick people off Medicaid if they don’t work enough hours in a month. The courts may be even more impatient with waivers that purport to make a more fundamental change to the state-federal program.

I’ll have more to say about the administration’s legal argument soon (here’s a twitter preview). For now, it’s enough to say that CMS is taking the position that it can spend federal dollars on the expansion population without regard to any of Congress’s instructions. I don’t think that’s a tenable legal theory, and that the states would be foolish to spend millions of dollars to sign up for legally dubious waivers. But states have done foolish things before, so we shall see.


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