Medicaid block grant risks health of state citizens for short-term gain

"This is a deal that New Hampshire would regret more over time both because it harms people in need and because it is the height of fiscal irresponsibility disguised as a clever new idea."

May 14, 2004

By Jonathan Baird
Member, New Hampshire Child Advocacy Network steering committee

Gov. Craig Benson and Health and Human Services Commissioner John Stephen are said to be initiating a plan to "block grant" the state Medicaid program. Under the euphemism of modernization and redesign, Benson would make New Hampshire the first state to test a Medicaid block grant program.

Benson and Company have arranged a no-bid contract with Maximums, a huge conglomerate with a questionable reputation, to draft a Section 1115 waiver application. The waiver would dramatically alter the state's obligations under the Medicaid program, and it would allow the state to use federal funds in ways not permitted by current law.

The block grant will not come from any bill introduced in the House or Senate and debated by the public. Maximus would submit a waiver application to a federal agency, the Center on Medicare and Medicaid Services, by Nov. 1, and they would seek federal approval on a fast track.

The waiver process is essentially secretive. It is outside of any lawmaking or regulatory public forum. While states are supposed to get notice, no law or rule mandates meaningful public participation. It remains unclear whether the public would even get to see this waiver before it goes to the Center for Medicare and Medicaid Services in the fall. It is also unclear how the Legislature will respond to this initiative.

No one knows what the exact content and scope of the waiver application will be. Without access to the waiver proposal, public comment is like shooting in the dark. The waiver becomes a private affair for the chosen few.

What we have is the governor adventuring with a critical program and enormous state dollars behind closed doors. The reasons for the block grant scheme remain murky.

Before any proposed change of this magnitude, the Legislature should have extensive study and discussion.
Medicaid provides health insurance to more than 175,000 New Hampshire residents who meet the program's eligibility requirements. The block grant approach would replace a program in which federal funding has been provided on an as-needed basis with capped federal funding. The payoff is that New Hampshire would continue to receive millions in federal "Mediscam" money.

This is truly a deal with the devil. It is the sacrifice of significant legal rights of some of our state's most vulnerable citizens for short-term money. At a time when the federal government has been threatening a $100 million reduction in Mediscam in 2005-2006 and the state is looking at a major budget deficit, the governor is planning to solve the budget crisis without raising taxes or increasing revenue.

Medicaid exists to provide essential health-related services to needy people. Through accounting tricks, Medicaid has been converted into an economic bailout for the general fund. Our little deal with the feds has nothing to do with health care for our most vulnerable elderly and disabled citizens.

Not enough people have questioned the propriety of using Medicaid dollars for purposes other than health care. It is ironic that while the federal government seeks to close this scam down, the Benson block grant scheme proposes to lock in Mediscam at its higher rate of return for New Hampshire. It is the latest ploy to avoid sending the state over the economic cliff.

This is a deal that New Hampshire would regret more over time both because it harms people in need and because it is the height of fiscal irresponsibility disguised as a clever new idea.

Under the block grant, Medicaid recipients likely would lose a legal right to health access, which is a probable central part of this scheme. If and when the state ran out of block grant money, it is unclear whether Medicaid recipients would have any legal recourse. They could be subject to a rollback of minimum standards, the institution of wait lists and increased co-pays and deductibles.

Under a block grant, if costs exceed the cap states would bear the added fiscal burden. There would likely be a further downshifting of cost. Towns, cities and counties would be hardest hit.

It is no secret that the Bush administration sees Medicaid block grants as a way to reduce federal spending. Early in 2003, they floated a national proposal to block-grant Medicaid, but they were foiled by the National Governors Association. Now Benson is their back-door man to resurface the idea as a demonstration project.

Medicaid could use genuine reform. Among other things, reimbursement rates have been so low that medical providers and pharmacists cannot afford Medicaid patients. The last thing we need in New Hampshire is to be a guinea pig in an ill-conceived experiment based on saving further money at the expense of our most vulnerable citizens.

Jonathan Baird lives in Wilmot and works for New Hampshire Legal Assistance.