Proposed changes to Medicaid threaten people with complex needs

Care management & redesign Policy & advocacy

In recent weeks, the Trump administration has introduced new threats to the Medicaid program. First, new guidance from the Centers for Medicare & Medicaid Services transforms the way that the federal government pays states for Medicaid. Second, the proposed fiscal year 2021 budget proposes deep cuts to essential social programs like food stamps, Social Security, and housing.

If enacted, all of these changes would radically transform the United States’ safety net, creating real threats to Medicaid and other essential services for people with complex health and social needs across the country.

New block grant guidance endangers Medicaid coverage for adults

Medicaid provides health coverage for 1 in 5 Americans. It is an essential and successful federal-state partnership. The Affordable Care Act’s expansion of Medicaid to previously ineligible adults has improved access to care, health outcomes, and financial security of enrollees in states that chose to adopt the expansion. Currently, states and the federal government jointly fund Medicaid without a cap, or limit, on spending.

Despite the marked success that Medicaid expansion has had on health outcomes, in late January, CMS released guidance (called “Healthy Adult Opportunity”) inviting states to apply for waivers to fundamentally transform Medicaid funding into a block grant in which federal funds are limited to a fixed dollar amount annually. Essentially, this guidance offers “shared savings” to states that spend less on Medicaid. Paired with the ability enact new eligibility requirements and reduce coverage, this new guidance would incentivize states to limit access to Medicaid.

Under the guidance states would accept an annual cap on federal Medicaid funding in exchange for options that would restrict access to coverage and care through strategies including work requirements, premiums and cost-sharing, the elimination of retroactive eligibility, and the elimination of presumptive eligibility at hospitals. States would also have the ability to limit benefits including prescription drug coverage, non-emergency medical transportation, and long-term care.

Healthy Adult Opportunity would apply to adults under 65 covered by Medicaid expansion who do not qualify for Medicaid on the basis of disability. However, many people with disabilities or chronic conditions do not necessarily qualify for federal disability assistance or long term services and supports. These individuals are included under states’ waivers and would be significantly impacted by these changes.

Massive cuts to healthcare and social safety nets proposed in the Trump administration’s 2021 budget

On February 10th, the Trump administration released a 2021 budget that proposes deep, dramatic cuts to Medicaid and other social safety net programs that are essential the health and well-being of people with complex health and social needs.

Building upon the threats to coverage and access created by the block grant guidance, the budget would cut Medicaid and Affordable Care Act funding by $1 trillion over the next ten years. It would also end enhanced federal funding for Medicaid expansion and impose mandatory work requirements for the adult expansion population in all states.

In addition to cutting Medicaid, the administration’s budget proposes significant cuts to essential social programs. The budget would reduce funding for the Supplemental Nutrition Assistance Program (SNAP) and the Temporary Assistance for Needy Families (TANF) program by over $182 billion and $20 billion over ten years, respectively. It also proposes cutting Social Security Disability Insurance and Supplemental Security income for some people with disabilities and eliminating the Social Services Block Grant, which states use to fund childcare, senior programs, housing services, and other important initiatives.

The administration’s proposed budget threatens housing assistance across the country by proposing to cut public housing funding by 43 percent and cancel Housing Choice Vouchers for about 160,000 households, which would endanger the ability of low-income individuals and families to remain housed. It would also eliminate flexible affordable housing funding sources like the National Housing Trust Fund and Community Development Block Grants.

Impact on patients with complex health and social needs and their providers

The “flexibility” offered by Healthy Adult Opportunity endangers care for all Medicaid enrollees in states considering waivers, and people with complex health and social needs are especially vulnerable. Work requirements, costs-sharing, and other eligibility cuts would place unnecessary burdens on patients and likely decrease the population covered by Medicaid. The elimination of the non-emergency transportation that people with complex health and social needs rely on would decrease basic access to care. In addition, the elimination of retroactive eligibility and hospital presumptive eligibility would endanger patient care and payments to providers and hospitals.

The cuts outlined in the administration’s 2021 Budget further threaten health and well-being for the country’s most vulnerable. If enacted, health coverage and access would decrease and individuals and families living in poverty would lose access to already limited social services.

The budget will now make its way through Congress, where legislators are likely to make changes before it is finalized. However, the budget represents the administration’s desire to dismantle essential safety net programs. 

What you can do

People with complex health and social needs, their caregivers, and their providers can use the following strategies to speak out against these proposed changes to Medicaid:

  • Contact your congressional representatives to insist they fight for a federal budget that preserves Medicaid and social service funding.
  • Use social media to tell your story and highlight the negative impact of Medicaid block grants and budget cuts.
  • If you live in a state that may consider applying for a Medicaid block grant, connect with your local representatives to make the case against pursuing the demonstration.

Additional resources:

  • Families USA compiled a digital toolkit with key talking points, personal stories, suggested tweets, and more resources to combat CMS Medicaid Block Grant Guidance.
  • The Coalition on Human Needs has a sample letter for contacting your congressional representatives, as well as a social media toolkit.
  • The National Health Law Program provided additional block grant talking points