The Trump Admin wants to overhaul Medicaid into Block Grants.

On Thursday, CMS gave the OK on a block grant structure for states’ Medicaid programs. If this proposal were enacted, it would mean that states would have the ability to receive a fixed sum of money to spend on healthcare how they see fit.

• States would also be able to impose further conditions of eligibility in determining whether an individual would be qualified for that state’s Medicaid program. CMS thinks these changes are necessary as a cost control in order to guarantee that the program has enough funding in the future.

How does Medicaid work today?

As Medicaid exists today, states receive varying levels of payment based on how many ACA enrollees they have. Additionally, there are no community guidelines, work requirements, or any other steps needed for Medicaid eligibility.

• Read the full 56 page CMS letter to state Medicaid directors here.

Give me some background.

Remember that Congress rejected this block grant proposal back in 2017 when the GOP was making a push to repeal and replace Obamacare. Now, the admin is trying to work directly through CMS.

• I would expect this policy to be challenged in court – I’m not a lawyer, but I would assume there’s an inherent question of legality in circumventing Congress.

So…Is this controversial?

I should note that Republicans tend to favor the block grant strategy (in an attempt to rein in Medicaid spending), but Democrats oppose these changes, saying that states need more accountability in how they spend these funds.

Most media outlets are labeling this policy as drastic and controversial, but I’ll leave that up to you to decide.

Here’s the big picture: the Trump administration is trying to make changes to the largest public insurance program in the nation serving our poorest population, so any alterations are almost guaranteed to have differing viewpoints.

• An ER doctor even went so far as to confront Mike Pence over the Medicaid changes in a diner.

Some more resources for a deeper dive:

• Trump administration to give states wide latitude in Medicaid Block Grant plan. (WSJ)
• CMS to allow Medicaid funding caps: 5 things to know (Beckers)
• (Opinion) The problematic law and policy of Medicaid Block Grants (Health Affairs)
• How would Medicaid block grants affect major payors?

In the miscellaneous policy category this week…

• The Supreme Court allowed the Trump admin to enact its controversial ‘public charge’ rule
• Hospitals may be double dipping in drug discounts, GAO finds
• Payers and employers are protesting HHS’ price transparency rule. Bottom line: they’re in support of letting patients know how much things will cost them out of pocket, but they’re not fans of publicly disclosing their reimbursement rates. Payors also think it’ll cost them bigly in administrative costs to get all of that data uploaded.
• Axios reports that a CMS proposal called the Medicaid Fiscal Accountability Regulation would place more scrutiny on types of state Medicaid payment arrangements and potentially cut Medicaid payments by 6% to 8%

Thanks for reading.

Save yourself some time by subscribing to our all-in-one newsletter. Subscribers get the first edition – every Monday night.

About the Healthy Muse.

The Healthy Muse was created to educate people on the healthcare system. It’s one weekly e-mail updating you on all the major election news, broader trends, big stories, and policy updates. Learn more about our vision here.

Get smarter and sign up below today.