Representatives Todd Rokita (R-IN), Tim Huelskamp (R-KS), Paul Broun (R-GA), and Jim Jordan (R-OH) recently introduced HR 4160, The State Health Flexibility Act, which would combine a state’s Medicaid and CHIP programs into a single block grant. The bill originated last year, when Republican Governors presented Congress with seven principles for reforming Medicaid. Under this bill, states would also have sole authority to determine eligibility, benefits, provider reimbursement rates, and to improve the quality of care and access to vital services. In addition, the bill would set the federal funding for Medicaid and CHIP at current levels for the next 10 years, which according to the bill’s sponsors will save $1.8 trillion compared to current law and the Affordable Care Act’s expansion. Also, under this bill, Congress would retain the ability to temporarily or permanently adjust federal funding levels as needed.
Since Congress was not successful moving a similar measure past the House last year, it is expected that the House FY 2013 Budget, which will be released in the coming weeks, will likely include language to block grant Medicaid as well. Although the House passed the proposal last year, the Senate rejected a motion to move to the proposal. The proposal, a non-negotiable for Democrats, is also a concern for some Republicans who are looking at alternatives to reforming the Medicaid program.
CWLA believes that a Medicaid block grant would be very harmful to current and potential beneficiaries by limiting access to coverage and services. Additionally, while some states have argued that a block grant would allow them more flexibility to meet the needs of their diverse constituencies, conversely, block grants also limit the amount of funding states receive thereby hindering the ability of states to meet the need in times of economic hardship, like the most recent recession.