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Illustration: Sarah Grillo/Axios

It may not get the most attention, but Medicaid is the prime target of the Trump administration’s health care agenda.

Why it matters: Medicaid covers about 70 million people — more than Medicare. It’s the biggest item in many states’ budgets. It is a huge part of the health care system, and the Trump administration has been fully committed, since day one, to shrinking it.

Driving the news: The Centers for Medicare & Medicaid Services yesterday laid out a plan to let states convert part of the program into a system of block grants — a deeply controversial move that would ultimately cut federal spending and likely prompt states to cover fewer people.

It’s the latest step in a consistent effort to pare back Medicaid.

  • Republicans’ 2017 bills to “repeal and replace” the Affordable Care Act proposed much deeper cuts to Medicaid than to the Affordable Care Act.
  • CMS, under Trump, has approved work requirements for Medicaid recipients. Those rules removed thousands of people from the rolls before they were frozen in court.
  • States’ work-requirement plans have also often required Medicaid enrollees to pay a small premium.
  • More technical regulatory changes to the program could cut federal funding and weaken some consumer protections.

All of this amounts to a “fundamental rewrite of the essence of the Medicaid program,” said Joan Alker, a Medicaid expert at Georgetown University and a critic of Trump’s proposals.

Details: Medicaid primarily covers children, people with disabilities and poor adults.

  • Trump’s agenda has largely aimed to chip away at coverage for poor adults — hence the euphemism CMS gave to its block-grant proposal yesterday: “Healthy Adult Opportunity.”
  • The proposal would cap federal spending on the population of adults covered through the Affordable Care Act’s Medicaid expansion. Without guaranteed funding for everyone who’s eligible, states would likely respond by making fewer people eligible.
  • Similarly, work requirements apply to “able-bodied” adults. Most of the people who lost their coverage under those rules were working, but were tripped up by paperwork requirements, according to some of the limited evidence so far.

Between the lines: CMS Administrator Seema Verma is the driving force behind this agenda. Conservative Medicaid waivers are her area of expertise.

  • And though CMS’ formal policymaking has mostly focused on the ACA’s Medicaid expansion, it has also endorsed more sweeping changes.
  • “In any administration, there are waiver initiatives that not-so-subtly tip their hand as to what they’d like to do to the entire program,” Alker said.

What’s next: Work requirements are held up in court. A federal judge has ruled that CMS violated the requirements of the Medicaid statute when it approved them, and stopped states from enforcing the rules. The administration has appealed.

  • There’s no question that Thursday’s block-grant proposal will face immediate legal challenges, as well.
  • Those arguments will likely hinge on CMS’ authority to alter the program’s funding structure without congressional approval.

The bottom line: The courts will ultimately decide how much of this agenda survives, but within the administration, it’s been full steam ahead since the beginning.

  • The Medicaid cuts in the repeal-and-replace bills sparked big protests and scared away moderate Republican senators, but CMS is still pursuing block grants. It didn’t stop approving work requirements after work requirements ran into problems In court.
  • And while some of the White House’s ideas on drug pricing or the Affordable Care Act have faltered or been discarded, its push to reframe Medicaid has been consistent.

Go deeper:

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