Block Granting Medicaid Would Cut Access to Affordable Health Care for Millions of Floridians

A Medicaid Block Grant would cut access to quality and affordable health care services for millions of Floridians. The fixed annual federal dollars the state would receive under Medicaid block-grant funding would not sufficiently cover unexpected public health emergencies or the growth in demand for health care services. Medicaid block-grants would shift the cost of health care services to the state, thus, disrupting the fiscal health of the state.
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Congress expanded health care access for Americans through the Affordable Care Act (ACA). Congressional leaders are now poised to repeal the Act but have not yet articulated a plan for replacing its provisions. Although Florida did not expand Medicaid to the extent allowed in the Act, Floridians have benefited from the availability of affordable, comprehensive health insurance. An additional 1.3 million Floridians have already enrolled for coverage through the marketplace for 2017 during the current open enrollment period.

What Is the Likely Effect of a Medicaid Block Grant?

Currently, Medicaid is available and guaranteed for every Floridian who meets the state’s Medicaid eligibility requirements. In 2016, the federal government paid 61 percent of the state’s Medicaid expenditures[1] the state was responsible for the balance. Funding to the state has been based on number of people served and types of services provided in Florida.

Under block grant funding, federal Medicaid funding would be provided as a lump sum based on an allocation formula developed by Congress. Typically, block grant funding is a two-edged sword. To the positive, the state receives additional flexibility in its use of the funds. To the negative, block grants of a fixed amount do not provide a guarantee of coverage for all who might need the program.

Absent details on the specific federal funding and policy, Floridians must rely on historical realities to project the future of Medicaid and the consequences of congressional action. We anticipate that the funding in the block grant will be less than the total federal funding for Medicaid as it currently exists in Florida. It is unclear whether the Florida Legislature will make up the reduced federal funding or, instead, will institute more stringent requirements for Medicaid services and reduce the current caseload.

Why Is the Medicaid Block Grant a Bad Idea?

Given the current sentiment toward entitlement programs in Washington and the enthusiasm for significant tax reductions, we presume that Congress would institute deep cuts to Medicaid, threatening benefits for millions of low-income Floridians, especially, children and people with disabilities. Deep cuts will especially affect the children who constitute 68 percent of 3.8 million Floridians who constitute the Medicaid and Kidcare caseload.[2]

Based on Speaker of the House Paul Ryan’s 2014 proposal for Medicaid and Children’s Health Insurance block grant funding, the Bipartisan Policy Center estimated that significant reductions would result from eliminating expanded services under the ACA, as well as failing to fully fund population growth and inflation in the out years.[3] The loss of federal funding on these bases will compound over time.[4] To offset significant federal Medicaid funding cuts, states will have to make difficult choices: increased waiting lists, deep eligibility cuts and benefits and decreased provider payments. The state could increase funding for the program, which is highly unlikely.

Further, block granting Medicaid may result in the state instituting stringent eligibility requirements such as work requirements, co-payments, or termination of coverage for people who are considered non-compliant with the new requirements.[5] These additional requirements would affect individuals with mental health and substance abuse disorders, those who have difficulty conducting everyday basic activities for medical reasons, those whose education makes obtaining employment difficult, and families having who lack access to child care or transportation.

The increasing loss of federal funding and the fixed nature of block grant disadvantages states like Florida whose population of eligible residents continues to grow. It further leaves the state facing difficult prospects for dealing with public health emergencies such as the Zika virus.

Florida is now the third most populous state according to the latest Census Bureau data.[6] It also has also one of the highest growth rates of older residents, whose medical needs and costs are higher. Over the next two decades, Florida’s elder population is projected to account for 59 percent of Florida’s population growth.[7] The state must be prepared to provide adequate services to these individuals.

What Should the State Do to protect Medicaid/KidCare?

Florida’s congressional delegation should reject any proposal, including Medicaid block-grant funding, that would cut access to affordable, sustainable, and quality health care for children, the elderly, the disabled, and working families and individuals of the state. State policymakers should consider the dire, long-term impact of such a proposal and the consequences of decreasing the care level and availability of health care to Florida residents.

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Notes

[1] Florida Legislature, Office of Economic and Demographic Research. 2016. Medicaid Federal Share of matching Funds, Revised by EDR.
[2] Kaiser Family Foundation. 2016. Monthly Child Enrollment in Medicaid and CHIP.
[3] Akabas, Shai et al. 2013. Paul Ryan’s Fiscal Year 2014 Budget: The Details. Bipartisan Policy Center.
[4] Park, Edwin. 2016. Medicaid Block Grant Would Slash Federal Funding, Shift Costs to States, and Leave Millions More Uninsured. Center on Budget and Policy Priorities.
[5] Ibid
[6] US Census Bureau. 2016. National and State Population Estimates. December 20, 2016.
[7] The Florida Legislature. 2016. Economic and Demographic News for Decision Makers. Vo.1, 2016, p. 9.

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