Why Should Mental Health Advocates Care About Medicaid Block Grants?

Every headline brings a new worry.  Buried among the frightening announcements is the statement that the new administration will push for Medicaid block grants.

The change seems benign.  For 25+ years Republicans have been making the argument that block grants would allow states more flexibility in administering funds and save money. The typical proposal would provide each state with a lump sum to meet needs served by the program.  The annual federal increase would be linked to general inflation instead of to increase in need or inflation in health care costs.  In return, states would be freed of many regulations concerning how and to whom they provide health care coverage.  Speaker Paul Ryan (R) has proposed block grants and has administration backing for his next attempt.

The reality would be an escalating reduction in access to health care for low-income people.  A report by the Center on Budget and Policy Priorities contains this language.  “As the Congressional Budget Office concluded in 2012 [about Ryan’s proposal] the magnitude of the reduction in spending…means that states would need to increase their spending on these programs, make considerable cutbacks in them, or both.  Cutbacks might involve reduced eligibility…coverage of fewer services, lower payments to providers, or increased cost-sharing by beneficiaries…all of which would reduce access to care.

The Urban Institute estimated that the 2012 Ryan proposal would lead states to drop between 14.3 million and 20.5 million people from Medicaid by the tenth year…and would lead states to cut reimbursements to health care providers by more than 30 percent…”   Click here for the report.

Why should this change worry advocates?  Quite simply, Medicaid pays the bills for many mental health services. In fact, it is more important as a source of funds for those services than private insurance and is particularly critical for people with serious mental illness.

Medicaid pays for inpatient care in general hospitals, medication, and doctor’s fees.  Many states also use Medicaid funds to provide optional services such as supportive home care,  case management, transportation, peer counseling, and respite care.  Patients, family members, advocates and medical professionals have spent years battling for those improvements.  Those gains could be eroded and even dismantled under a block grant program.  In addition, reimbursements to doctors–which already are low–likely would be cut even further.

UPDATE:  Click here for an article by David Wahlberg in the WSJ about the impact of Trump’s health care proposals in Wisconsin.










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