Why The Possibility Of TennCare Converting To A Block Grant Has Opponents Growing Worried

A proposed change to how Tennessee’s Medicaid program is funded by the federal government has some health care advocates worried. The state could be one of the first to ask for a so-called “block grant” to pay for the health care of low-income residents.

Conservatives want more flexibility in how to spend federal money. A block grant would be a lump sum with fewer strings attached, rather than having the federal government pay for two-thirds of the expenses for each of the
1.3 million beneficiaries.

The legislation, 
HB1280/SB1428, would direct TennCare to negotiate for a block grant. Any deal struck with the Trump administration would likely have to come back to the legislature for approval.

Some progressives have hoped a block grant could double as a way to expand the Medicaid program to cover the working poor, which they’ve been trying to do since 2012. But as the measure has progressed through the legislature, Democrats like Larry Milller of Memphis have tried to amend the proposal, to no avail.

“We’re looking at 200,000 Tennesseans currently not covered. Why would we not to negotiate that?” he asked the measure’s sponsor, Blountville Republican Timothy Hill, at a hearing last week.

Hill says he’d leave the details to Gov. Bill Lee’s administration. That includes the total amount of money, though he says he can’t imagine accepting less than the $7.5 billion currently flowing into the state.

But professor Andy Schneider of Georgetown University’s Center for Children and Families says the Trump administration has already signaled block grants would need to save money.

“It’s quite clear that the administration is looking to Medicaid for significant domestic policy savings,” he said on a conference call with Tennessee reporters. The White House
budget released this week would cut $1.5 trillion  from Medicaid over 10 years.

The legislation still has several hurdles to overcome in Tennessee. Gov. Bill Lee has not explicitly endorsed the idea, but his office said in a statement to WPLN that he’s willing to consider it:

“While the administration has already begun work in addressing costs and funding innovative solutions to improve delivery of care, he is always open to reviewing any thoughtful proposal from the legislature as we explore ways to work with the federal government and achieve more flexibility in funding.”

Eric Carlson with Justice in Aging says it’s hard to imagine anything that would be tenable long-term, since a grant likely would not grow as the Medicaid population surges during economic downturns.

“It would be a radical, catastrophic change to Medicaid,” Carlson says. “The problem with the block grant is you eliminate everything.

“Whether this is throwing the baby out with the bath water, whatever metaphor you might choose, you’re eliminating all these protections. You’re locking down the revenue at a level that almost assuredly is insufficient.”