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Medicaid Block Grant Fever

A Fever That Could Cost Countless Lives

February 22, 1996

AIDS Action Network Alert

Block-grant fever is upon us: Eulogized in Lamar Alexander's campaign speeches. Touted by the National Governors' Association (NGA) in its "new" approach to Medicaid reform. Preached by the Republican leadership in Congress. Despite this apparent stampede, the block-granting of Medicaid remains one of the most contentious issues separating President Clinton and GOP congressional leadership in ongoing budget negotiations.

On the one side, President Clinton has pledged full support for Medicaid's entitlement status and for federal cost-sharing for medical care for the poor. On the other, congressional Republicans seem equally committed to ending Medicaid's tap into the federal treasury by block-granting the program to states and removing all meaningful federal standards on eligibility, benefits, quality of care and consumer protections.

The NGA's bipartisan compromise on this issue, designed to "break the gridlock in budget negotiations," on balance is much closer to the Republican leadership's approach than to President Clinton's:
  • The governors would allow increased federal contributions to states with increases in people in poverty, but would block-grant the program to the states, removing all federal oversight of eligibility for disabled people and of HMO-type managed care programs for the poor.

  • The governors would allow states to define the scope, amount and duration of medical benefits that states must give to the poor, so that Mississippi, for example, could decide that one hospital day per year, one nursing home day per year, and one doctor's office visit per year for a poor elderly person or AIDS patient would be the full extent of medical coverage.

  • The governors would end, once and for all, the right of Medicaid recipients to challenge denials of medical services in federal courts; in New York and other states, that could mean a years-long wait in the clogged state courts for any redress for coverage denials. AIDS and cancer patients obviously do not have that time to wait.

So what is the problem here? Why should we not trust these governors in their wisdom to do what's right for their states? That is an easy question to answer: We need to remember that governors are a special interest group themselves, seeking in this proposal about $100 billion a year in federal taxpayer money without accountability to the federal government. What elected officials wouldn't like to be handed billions of dollars, never themselves have to vote to raise the money in taxes in the first place, and then be subject to no oversight as to how the money is spent? This is a patronage and power bonanza for the governors and is reason enough to be suspicious of the NGA approach to Medicaid.

A willingness to trust entirely in the wisdom of the states -- in Medicaid as in many other health and welfare programs now being eyed for potential block granting -- puts at risk the many vulnerable people who rely on Medicaid for their basic medical care and prescription drugs. Among these are people living with AIDS, of whom about half receive their basic medical care from Medicaid. Examples around the country show the problems of Medicaid block-granting-without-strings. When states have acted alone, as in defining optional benefits under Medicaid for persons with AIDS, the results on occasion have been catastrophic.

Take, for example, Missouri, whose Medicaid program in the late 1980s refused to pay for AZT for people with AIDS, and was forced to do so only by a lawsuit brought by AIDS advocates. Even today, under the "flexibility" of federal standards that leave many Medicaid coverage choices entirely up to the states, the Texas and South Carolina state Medicaid programs will pay for a patient to be on only three prescriptions per month, this although the advanced AIDS or terminally-ill elderly patient often needs ten or more prescription drugs to sustain failing body systems.

Another 14 states do not even provide prescription drugs under their Medicaid programs to the medically indigent. States have been left to make their own choices, and have done so, often to the detriment of terminally ill people who then must choose between paying rent and getting the drugs and medical care they need.

In AIDS, there is more danger now than ever before in leaving coverage decisions up to the states. Recent treatment advances in drugs called protease inhibitors promise to extend the lives of people with AIDS for years, making them feel better and able to continue to work. Yet these drugs are expensive, costing about $14,000 per patient per year. Will Alabama, or any state with governors and state legislatures hostile to AIDS causes, decide to cover these drugs? I doubt it.

For evidence, look at Tennessee, where the state senator heading the committee that oversees Tennessee's Medicaid program (TennCare) recently questioned whether the state ought to cover care of AIDS patients at all: "Has anyone made a decision for taxpayers to pay for a bizarre lifestyle?," he said in early February, in response to reports of the promise of these new AIDS drugs. Or as a remarkably literate and well-informed woman in Topeka, Kansas, put it, in her written response to a C-SPAN broadcast of a speech in which I criticized the NGA's Medicaid block-grant proposal: "Our governor will prioritize our block grant money -- the children, poor, elderly, disabled will be cared for. You'll have to find someone in your group to pay for your irresponsible sex life." Leaving aside her presumptions about my sex life, would she think the same, I wonder, of elderly people crippled by heart disease or cancer from years of choosing to gorge on red meat and cigarettes?

Our federal government's purpose is to assure the common, national good. In an epidemic that knows no state boundaries, that affects all of our families and communities, the way to approach Medicaid and other vital prevention and care programs is not just to punt the issue to the states and hope for the best. Judging from history and motives, there is more reason to have confidence in the federal government than in the beneficent governors, a prominent Tennessee senator, and a lady from Topeka, with all she represents. In AIDS, the cost of block-granting without accountability would be measured in lives needlessly shortened and lost. Regardless of what the governors think, we as a nation should not be willing to pay that price.

For more information, contact
AIDS Action Council
1875 Connecticut Avenue NW #700
Washington DC 20009
202-986-1345 (fax)
202-332-9614 (tty)

Mark Barnes is executive of AIDS Action Council, the only national organization devoted solely to advocating on federal AIDS policy, legislation, and funding. Founded in 1984, AIDS Action represents more than 1,000 community-based AIDS service organizations nationwide.

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This article was provided by AIDS Action Council.