The radical Republican plan to gut Medicaid as we know it is alive and well in the state of Tennessee.
Bill Lee, Tennessee’s Republican governor, unveiled on Tuesday a plan to make his state the first in the nation to overhaul its Medicaid system into a so-called block grant program. Going back to Ronald Reagan’s presidency, transforming Medicaid — the Great Society initiative to provide suitable health care for the young and the poor — into a block-grant model has long been a dream of the conservative right as a way to remove power from the federal government and shift it to the states.
Generally speaking, block granting works like this: Instead of the federal government covering a portion of a state’s health-care costs for eligible people, the state would take an upfront chunk of money from Washington and then choose to spend it in whatever way it chose to. A block-grant plan would also let a state off the hook for providing the core health-care services to some of the required types of patients that come with receiving Medicaid funds. Unlike the strictest version of block-grant plans, Tennessee’s program would includes provisions that would give the state some extra money if the Medicaid rolls expand.
The plan, called TennCare, requires approval from the federal government, leaving the fate of health care for poor Tennessee residents in the hands of Donald Trump’s Health and Human Services Department.
Gov. Lee has said his new plan would save Tennessee upwards of $1 billion and result in no loss of coverage; his administration has argued that the way Medicaid currently works, reimbursing the state after health care has been delivered, has led to “misaligned financial incentives.” Lee has not shied away from pointing out that, with the Trump administration repeatedly signaling its interest in state-level block grants, Tennessee could be the model for more states to follow in how Medicaid serves the American people.
Lee told the Washington Post that the Trump officials “need some examples to show the rest of the country how to do this, and we have an example.” He continued, “It would be very important for the country to see an opportunity to lower the cost of Medicaid services without changing the quality or level of those services to the Medicaid population. For Tennessee to be an example of how we can deliver that would be a very big deal.”
Critics of block grants argue replacing Medicaid’s decades-old reimbursement model with an upfront cash system — a hobby horse of former Republican Speaker Paul Ryan, among many other modern Republicans — would lead to states slashing their spending on care for the most vulnerable members of society, including low-income pregnant women and children.
In July, a group of 27 nonpartisan health and poverty organizations including the American Cancer Society and the United Way Worldwide urged Seema Verma, head of the Centers for Medicare and Medicaid Services (CMS), to reject any plans to allow states to switch from the traditional Medicaid model to block grants. The groups say that block grants would lead to less spending on health care for the vulnerable, especially in an economic downturn, and result in states throwing up new barriers to treatment to keep their costs down. “Simply put, block grants and per capita caps will reduce access to quality and affordable healthcare for patients with serious and chronic health conditions and are therefore unacceptable to our organizations,” the groups write.
Trump has repeatedly put block grants plans in his budgets, but those proposals have gone largely ignored by Congress’ own budgeting process. Now, however, the administration has its best chance yet to start to cut away at the social safety net — and to realize the party’s longtime campaign to gut one of the most consequential Democratic achievements of the past 50 years.