Trump’s audacious new plan to cut Medicaid, explained

President Donald J. Trump with (clockwise from left) Ms.Seema Verma, Administrator of the Centers for Medicare and Medicaid Services, Secretary Tom Price, U.S. Secretary of Health and Human Services, and Vice President Mike Pence on March 14, 2017, in the Oval Office of the White House. Image: Flickr Creative Commons | https://flic.kr/p/U3Tp7r

[Vox] President Donald Trump’s administration is taking its most audacious step yet to roll back Medicaid, with a new plan that would cap spending for the government program upon which poor Americans depend for health insurance.

The Centers for Medicare and Medicaid Services announced on Thursday they would accept applications from states that want to set up a Medicaid block grant, a long-held goal of ideological conservatives who want to scale back the social safety net, and one deployed successfully to severely limit cash welfare benefits in the 1990s.

These spending caps would fundamentally change how the program is financed, ending Medicaid’s days as an open-ended entitlement by putting new hard limits on how much the government is willing to spend on health care for certain enrollees. Medicaid would no longer pay whatever is necessary to provide medical care to the people in or near poverty who qualify for its benefits. Instead, spending would be limited in states that got a waiver from the federal government, and they could impose cuts on benefits.

Trump has already tried to fundamentally alter the Medicaid program through work requirements, though he’s been stopped in the courts. But the block grants represent an even more basic remaking of Medicaid on his watch, one that would lead to spending cuts and fewer benefits.

The block grants are also, like work requirements, a roundabout way to roll back Obamacare’s expansion of Medicaid specifically. Under the guidance released by CMS, it would be benefits for people newly eligible under the health care law — mostly childless adults and parents who are living in or near poverty — that would be subject to the block grants. In that context, despite Trump’s campaign promise not to cut Medicaid, these policies make sense as a means to an end for the conservatives whom Trump has put in charge of his health department.

Block grants could run into trouble in the courts, just as Medicaid work requirements already have, if judges find they are contrary to the purpose of the Medicaid program (which is supposed to be providing medical benefits to vulnerable people).

But Trump’s latest steps to pare back Medicaid, taken early in an election year, are a reminder that his administration has proven steadily committed to cutting federal health care spending.