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Opinion

New Administration, Old Approach: Trump Advocates Medicaid Block Grants and ACA Repeal

January 27, 2017

As the shifting legislative landscape of President Trump's first 100 days continues, two major developments emerged in the health care reform world: that the Trump administration plans to block grant the Medicaid program and that President Trump signed an initial executive order weakening the ACA.

From its inception in 1965 under President Lyndon Johnson until the present day, Medicaid has served as a public insurance program for low-income individuals, families, and people with certain disabilities. Unlike Medicare, which was created at the same time and is both federally funded and administered, Medicaid is a federal-state partnership program in which each individual state administers their own Medicaid program using a mixture of state and federal funds, provided that certain services and populations are covered. For the entirety of its existence, Medicaid has been an entitlement program, which means that the government is required to provide coverage for anyone who meets the eligibility rules for enrollment. This means that the amount of money being spent on a state's Medicaid program fluctuates from year-to-year based on how many people qualify for coverage.

Every Republican President since Ronald Reagan has tried, and so far failed, to turn Medicaid from an entitlement program into a discretionary block grant program. Block granting Medicaid would mean the federal government would present states with a predetermined amount of money to serve their low-income and disabled residents at the beginning of each year. Most plans to block grant Medicaid would determine the amount of funding based on previous state and federal Medicaid spending in a given state, with slight changes each year to account for inflation. The states would then be allowed to determine exactly how to spend that money with many fewer requirements than in the current system. This means that if there were a recession, an unexpected disaster, disease outbreak or if general health care costs continued to rise faster than inflation, state governments would not be given extra federal funds.

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In such a situation, states would address the health care needs of their low income and disabled residents through a variety of means, but most would reduce or eliminate covered services, restrict access to the program, or introduce higher cost-sharing mechanisms. Taken together, this would adversely affect the health and wellbeing of those in need of care. In a best case scenario, states would take on the excess costs themselves. However, this might prove difficult since many states are required to balance their budgets which might require tax increases or additional sources of revenue to meet these increased Medicaid costs. As a result, many states would choose to avoid added costs by changing the Medicaid eligibility criteria, reducing Medicaid benefits, and simply not providing care to people who are eligible. According to an analysis of a previous Republican proposal from 2012, the block granting of Medicaid could wind up dropping anywhere between 14.3 million and 20.5 million people from care.

It is nearly impossible to overstate how devastating Medicaid block granting would be for people living with or at risk of contracting HIV. Right now, Medicaid is the largest source of insurance coverage for people living with HIV, covering more than 40% of people with HIV who are in care. At the same time, Medicaid accounts for 30% of all federal HIV spending and when combined with state Medicaid spending, represents the 2nd biggest source of public HIV financing, trailing only Medicare. Under block grant funding, people living with HIV could bear some of the largest burdens of all impacted populations, because state governments may choose benefit designs that disproportionately affect pricey HIV medications. Given the amount of stigma regarding people living with HIV, LGBT people, and lower income populations, it is possible that some states would choose to do so. Although it may sound unlikely that a state government would discriminate against the provision of medical treatment for certain populations, it has been suggested in the past. For example homophobic legislators in Tennessee openly questioned providing funds to treat people living with AIDS due to their "bizarre lifestyle." AIDS United strongly opposes block granting Medicaid and we urge readers to call their legislators with that message.




President Trump's executive order intended to weaken the ACA may be more important for what it suggests than for what it actually accomplishes. The executive order directs federal agencies to use their current regulatory authority to "minimize the economic burden" and minimize or remove "any provision...that would impose a fiscal burden on any State, or a cost, fee, tax, penalty, or regulatory burden on an individual." The order would also grant waivers to states that undercut the cost of consumer protections, encourage the sale of health insurance across state lines, and encourages agencies to use discretion to avoid expanding the ACA.

By himself, Mr. Trump doesn't have the power to repeal or directly impede the implementation of the ACA. However, he can instruct the employees of federal agencies to begin chipping away at the law's effectiveness. For example, the Trump administration can't formally strike down the ACA's individual mandate that all Americans be insured, but he can instruct the IRS to simply not fine anyone who doesn't abide by the mandate, rendering it useless. Similarly, the executive order instructs the Department of Health and Human Services (HHS) to provide states with considerable leeway when it comes to the implementation of their health care programs and encourages HHS to accept waivers from states that would help them get around ACA regulations that they find overly restrictive.

On Thursday, the administration reportedly took another step to undermine the ACA. White House officials ordered the Department of Health and Human Services to halt all advertising and outreach efforts encouraging enrollment in ACA health plans purchased on the Healthcare.gov marketplace during the last days of the 2017 open enrollment period. This is significant because in previous ACA open enrollment periods, the final days were among the heaviest for signing up for health coverage. The White House action does not affect people's ability to sign-up for coverage on the website; open enrollment ends Tuesday, Jan. 31.

AIDS United believes that the ACA must remain in place and that no effort to make changes, including this executive order, should attempt to repeal the law without an immediate and effective replacement in place. AIDS United will continue to provide concise analysis of the what's happening in Washington regarding health care reform and why it should matter to people living with HIV.


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This article was provided by AIDS United. Visit AIDS United's website to find out more about their activities and publications.
 

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