ADEA State Update

The Future of Medicaid and CHIP Under a New Administration

(Medicare and Medicaid, ACA, Funding, CHIP, Medicare and Medicaid Services, Medicaid Expansion) Permanent link   All Posts


Medicaid beneficiaries could be at risk of losing health coverage if President-elect Donald J. Trump and a Republican-controlled House and Senate follow through on their promises to cut Medicaid spending and transform the state-federal program, which provides health care for low-income Americans.

The new Administration and Congress have several policy options at their disposal that could dramatically impact funding for the Medicaid program. Three of the proposals that have been mentioned during the campaign season are highlighted below.

Repealing the ACA and the Impact on Medicaid Expansion

Both President-elect Trump and House Speaker Paul Ryan (R-WI) have vowed to work to repeal the Affordable Care Act (ACA). Thirty-one states and Washington, D.C., expanded Medicaid eligibility under the ACA, adding approximately 15.7 million people to the program. According to the Centers for Medicare and Medicaid Services, approximately 64 million people were covered under Medicaid in 2015.

However, President-elect Trump’s vow to work with GOP majorities in the House and Senate to repeal the ACA could create a problem for pro-expansion Republican governors whose residents would lose benefits if the law were repealed. Among them, Vice President-elect Mike Pence (Healthy Indiana Plan 2.0) and vocal Trump supporter Chris Christie (New Jersey Family Care) who both accepted funding from the federal government to expand Medicaid to cover hundreds of thousands of low-income adults in their respective states.

Block Grants

President-elect Trump and Speaker Ryan have discussed transforming the Medicaid program into a block grant. Under the current Medicaid program, coverage is guaranteed for everyone who’s eligible. The states’ obligation is to cover certain groups of people and to provide specific benefits. 

However, if federal funds flow to states through block grants, states would have more flexibility to run their Medicaid programs as they wish—including cutting benefits and eligibility. Supporters of block grants contend that the new system would allow the federal government to spend less on Medicaid and make states responsible for covering costs beyond their federal allotments. Although transforming Medicaid into a block grant program has been discussed for decades, the policy has always been met with strong opposition from some states, health providers, health care advocates and Democrats. 

Per Capita Caps

Another option to reform Medicaid funding is known as a per capita cap. Under this policy option, states would be given a set amount of money per enrollee, which would increase each year, but some argue the increase may not keep up with rising health expenses. However, potentially, under this type of funding policy, as enrollment grows so would funding.

chipkidsThe Children’s Health Insurance Program

Funding for the Children’s Health Insurance Program (CHIP) is set to expire at the end of September 2017. Members of Congress could pass a two-year extension, however supporters of the program that provides health insurance to low-income children would prefer a longer approval. CHIP’s legislative authority will expire in 2019, as will requirements that prevent states from making it more difficult for people to enroll in the program. The levels at which the program is funded will also be a point of contention in Congress because the ACA, which President-Elect Trump vows to repeal, provided states with a 23 percentage point boost. CHIP advocates are pushing for Congress to extend the funding in the spring to give state legislatures that adjourn early in the year time to determine their health budgets. In 2015, 8.4 million children were enrolled in CHIP, thus qualifying for free or low-cost health and dental coverage.

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