Medicaid provides an important social safety net for the most vulnerable members of society. Supported by matching federal funds and administered by state governments under federal guidelines, the program varies considerably from state to state based on the individual program designs. Medicaid supports the blind, disabled, elderly, and impoverished, providing access to vital, frequently lifesaving care. In addition, the program provides provisions to cover the uninsured, creating access to basic healthcare for vulnerable populations. In many cases, Medicaid provides care that could otherwise not be accessed, and the expanded use of various Managed Care Organization (MCO) models allows for access to substantially more economical preventative medicine, avoiding the need for highly burdensome emergency care. As the expense of this program has grown, it has become a source of significant debate, and policy leaders continue working to institute cost controls to reign in expenditures.
While it is imperative to find fiscally conservative solutions to reduce cost inflation, waste, fraud, and abuse of Medicaid benefits, a blanket conversion of the Medicaid program to a block grant system would create federal cost savings on the backs of struggling State governments. As a complex program impacting a large and diverse group of recipients, it should not be assumed that states would be successful in immediately innovating, armed with flexibility alone. States failing to rapidly innovate would either need to immediately and drastically cut benefits in order to bridge the gap between fixed federal funding and program costs or would need to divert funds from other essential functions such as education in order to cover Medicaid shortfalls.
Converting Medicaid into a block grant program effectively skirts federal responsibility to address a growing systemic issue that has placed enormous burden on both the public and private sectors. As healthcare costs continue to rise, placing heavy burden on federal, state,municipal, and private sector budgets, it is clear that innovative solutions to cost inflation are as essential as they are elusive. It will take significant effort by all stakeholders to address this problem head on, requiring collaboration across a broad array of stakeholders. Universal block grant funding is not a viable alternative to solving this problem as a nation.
By continuing the allowance of partial and global waivers under the current Medicaid program, providing exemptions for states with specific plans for substantial reform of their individual Medicaid programs, other State governments can learn from the changes that are occurring in Rhode Island and Washington, and institute the program changes best suited for the efficient delivery of services to their respective populations. As we learn from pilot reform efforts, Medicaid can continue to evolve into a dynamic program driven by local needs, without discarding its current structure entirely by way of the one size fits all block funding model.