Would it be legal to block grant Medicaid?

I don’t know, and I doubt the Trump administration does either. But we may soon find out.

With the Trump administration’s encouragement, Tennessee is moving ahead with a waiver to block grant its Medicaid program under section 1115 of the Social Security Act.  “Currently,” as Stephanie Armour explains at the Wall Street Journal, “Tennessee, like other states, gets open-ended federal dollars because the government matches a percentage of state spending. A switch to block grants would essentially cap funding.”

As I’ve explained before, the language of section 1115 is really broad. But it’s not infinitely elastic. A waiver has to be a genuine experiment that advances the Medicaid statute’s purposes. You might conceivably be able to squeeze block grants in there: for decades now, waivers have been used in expansive ways that would’ve shocked 1115’s drafters.

But block grants are a big step past work requirements, which one court has already invalidated because they don’t advance Medicaid’s purposes. And work requirements are themselves a big step past prior waivers. Besides which, the whole point of block grants—if we’re being honest—isn’t to run an experiment or make Medicaid work better. The point, instead, is to give states the latitude to cut beneficiaries or benefits. That doesn’t sound to me like it’s consistent with Medicaid’s purposes.

There may also be landmines in the Medicaid statute that would make it impossible to block grant the program. Section 1916(f), for example, says that you can’t use 1115 authority to tinker with the program’s general rules governing premiums and cost-sharing, except under really restrictive circumstances. That particular provision wouldn’t preclude block grants, but there may be some other explicit limitation on 1115 that I don’t know about. The Medicaid statute is a ferociously complex piece of legislation; if anyone can point me to other parts of the law that may pose problems for block grants, I’d love to see them.

At a minimum, there will be lawsuits.


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