Sep 17, 2019

Tennessee becomes first state to introduce Medicaid block grant plan

Illustration of a shadow of a gavel hovering over a medical plus symbol

Illustration: Sarah Grillo/Axios

Tennessee on Tuesday released its plan to transform its Medicaid program into a block grant, marking the most aggressive red-state Medicaid reform proposal yet, reports the Washington Post.

Why it matters, per Axios' Bob Herman: If Tennessee garners federal approval on a policy to cut Medicaid funds — and survives the subsequent lawsuits it'd surely face — it would encourage other conservative states to do the same. This would be a radical change to the medical safety net for the nation's poorest citizens.

The big picture: While converting Medicaid into block grants has long been a goal of conservatives, Republicans were unable to make the change federally in 2017 as part of their Affordable Care Act repeal effort.

  • The state waiver process tees up a test of how far the Trump administration will go to promote state flexibility, and whether current law will allow such a radical change.
    Red state attempts to add work requirements to Medicaid have so far run into road blocks in court.

Block grants allow the federal government to give states a lump sum annually to cover Medicaid costs without having to abide by some of the rules.

  • As it stands, the plan would impact more than 1 million of the 1.4 million residents using TennCare, the state's Medicaid program, per the Washington Post.
  • The plan wouldn't change coverage of prescription drugs and payments to hospitals that treat low-income patients.

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