Analysis: Trump Poised To Aggressively Gut Medicaid


The Trump administration unveiled new rule changes that would allow states to slash funding which would gut Medicaid.

The Trump administration unveiled the “Healthy Adult Opportunity,” which would encourage states to cut benefits and narrow eligibility for residents who qualify under the Affordable Care Act’s Medicaid expansion provision, according to the Los Angeles Times

The administration boasted that the new rules would give states “new levels of flexibility” in running their Medicaid programs, but they would in fact set annual caps for Medicaid that cannot be exceeded. Setting a concrete budget destroys flexibility.

Medicaid administrator Seema Verma and her boss, Health and Human Services Secretary Alex Azar, offered no explanation for “how HHS can make a fundamental change to Medicaid’s financing structure,” Nicholas Bagley of the University of Michigan Law School observed.

“That’s going to be a big legal problem for any state rash enough to move ahead with one of these proposals,” Bagley wrote on Twitter. 

“Today’s announcement is the cruelest step yet by the Trump administration to slash American healthcare and dismantle basic safety net programs,” Sen. Ron Wyden (D-Ore.) said. Republican efforts in Congress to change Medicaid to a block-grant program failed, Wyden observed, “due to an outcry from families across the country over the consequences for children, seniors, individuals with disabilities, and the millions of working families who rely on the program for essential health coverage.”

Medicaid pays for roughly half of all births in the United States, covers 62 percent of all nursing home residents, and is the largest single source of payment for mental health services. One-third of all children are additionally enrolled in Medicaid, making the program the largest single source of medical coverage in the nation.

Under current law, Medicaid funding can rise or fall with need, so funding can respond to unforeseen shocks.

Health insurance expert David Anderson of Duke University noted last year that shocks could be “a major storm like Hurricane Maria in Puerto Rico, they can be mass unemployment like 2008-2009, they can be a new technology like hep[atitis] C cures or they can be a new disease like Zika … Block grants are not designed to respond to negative shocks.”

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