Policy Resources

The Mississippi Health Advocacy Program (MHAP) strives to be a strong, effective voice for improved health care for all throughout the state of Mississippi. To that end, if you’re a reporter in need of information on healthcare in Mississippi, statistics, reports, graphs, interviews or anything else, please contact us.

Contact

Carly Quinn
cokeefe@mhap.org
Phone: 601.353.0845
Fax: 601.353.0329

Typography is the art and technique

How would a Medicaid block grant work?

A block grant is a fixed amount of money that the federal government gives to states for a specific purpose. Sometimes block grants are called “capped” funding or “allocations.” If a Medicaid block grant formula were based on historical spending levels, the picture would not be rosy: By several measures, Mississippi has the most limited Medicaid program of any state.

Under an annual block grant funding scheme, Mississippi would receive a fixed amount of money each year. If the federal money was exhausted before the end of the fiscal year, the state would have to pay 100 percent of additional costs – or terminate health care coverage for vulnerable seniors, children, or people with disabilities. A block grant would be based on today’s expenditures, at a time when the Legislature has cut Medicaid’s budget. Such grants over time would not take into account population growth, public health threats, natural disasters, costly medical technology advances or new medicines, continued rising costs of prescription drugs, other medical treatments or a down-turn in the economy. Mississippi would have to pay for all inflationary costs, not just our current 26 percent state share. Even if Congress added a built-in inflation factor to increase the grants from year to year, because medical inflation is unpredictable and has been rising at double-digit rates in recent years, the state would be assuming a big financial risk.

Mississippi has a bare-bones Medicaid program with very few optional services or expanded coverage, and we have among the most stringent eligibility requirements in the nation (that is, the income limit for Mississippi participants is among the lowest). Thirty-one other states have expanded Medicaid to cover low-income adults, and others have added optional services, such as dental treatment for adults. States that have chosen to broaden the population served or to provide additional services beyond federally mandated minimum categories will likely be rewarded with much larger block grants than Mississippi.

Traditionally, block grants have meant a state received a frozen amount of money with no strings attached. But “strings” are what keep Medicaid programs from charging co-pays that poor people cannot afford; strings insist the program provide certain benefits such as doctor visits, hospital stays, x-rays, treatments; strings tell states they must serve pregnant women, the disabled as well as children, the elderly and foster kids.

There are many unanswered questions about what Congress will propose. The proposal might be to roll chip funding and Medicaid funding into one block grant. It could end Medicaid’s entitlement status, meaning that states would not have to serve everyone eligible. Some eligible patients could be turned away, or benefits could be cut. States could create waiting lists, or end the program if the money ran out before the end of the fiscal year. Congress could tell states they would receive a 1 percent reduction in funding over last year’s amount and reduce funding by 1 percent each year over the next 10 years. How would a state like Mississippi, with its already minimal program, respond?

Coverage Implications for Mississippi Residents

© 2016 Mississippi Health Advocacy Program