Medicaid Not Off the Table Just Yet

While talks of turning Medicaid into a block grant have slowed dramatically, the fact remains that there will be some level of Medicaid cuts that states and beneficiaries will have to face. The extent of the cuts varies from plan to plan, but nearly all of the major budget proposals (aside from the one put forth by the House Progressive Caucus) include cuts of some sort to this and other entitlement programs. As Congress and the Administration continue to look for ways to reduce the federal deficit, Medicaid remains one of the biggest targets. In particular, as the budget negotiations continue at the federal level, states will have to start considering what these cuts will mean for their service providers and their beneficiaries.

As states prepare to see a decrease in the federal share of Medicaid, we are likely to see an increase in Medicaid waiver requests as states seek some form of fiscal relief (keep in mind that the enhanced FMAP, or Federal Medicaid Assistance Percentage, will phase out at the end of this month). While waivers allow states greater flexibility to best meet the needs of their constituents, some states use waivers to avoid covering costly enrollees. One thing is for certain: the Medicaid beneficiaries that constitute the majority of the expenditures (including children in the child welfare system and others with disabilities) will continue to depend on Medicaid at an alarming rate. For many of these individuals, Medicaid is their sole safety net.

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