Medicaid Block Grants: The Tipping Point in the State-Federal Partnership?
(February 20, 2020)By Marie Zimmerman, Vice President, Medicaid Transformation and Financing, Jennifer Ryan, Executive Vice President, Stacie Weeks, Principal, Medicaid Policy, and Julia Smith, Associate Director, Medicaid Policy
On January 30, 2020, the federal Centers for Medicare & Medicaid Services (CMS) released a long-anticipated letter to state Medicaid directors outlining a new Section 1115 waiver—the Healthy Adult Opportunity (HAO) waiver. This waiver, according to CMS, will allow states to “provide cost-effective coverage using flexible benefit designs,” but such a design will involve a block grant or per-capita cap on their Medicaid programs. There are many considerations states will need to weigh before deciding to enter into such a financing arrangement with the federal government. While the HOA waiver appears to give states additional flexibility to manage their programs as they see fit, the real purpose of the HOA waiver is to shift the balance of financial responsibility for the Medicaid program to the states. The flexibility is secondary....
