Trump's Plan Could Give Texas Conservatives The Medicaid Program They've Always Wanted

Jan 26, 2017

It’s light on details, but so far the Trump administration has proposed one big change to how we pay for health care in the U.S. President Trump wants to turn the federal Medicaid program into a block grant system. This basically means states would get a fixed amount of money from the feds to run the program themselves.

Credit Todd Wiseman / Texas Tribune

This idea has been popular among conservatives in Texas, but there are a lot of reasons it has never happened.

You don’t have to go too far back to find a Texas Republican espousing the virtues of a block grant program.

Back in 1995, then-Texas Gov. George W. Bush visited congressional leaders during the government shutdown and tried to convince them to turn the keys to the Medicaid program over to him and other governors

“Texans can run Texas. We are willing to help balance the budget, but we want the freedom to run our Medicaid program,” he told reporters on Capitol Hill.

Congress didn’t capitulate, though. In fact, even when Bush became president he couldn’t make a block grant system happen.

Dr. Deane Waldman with the Texas Public Policy Foundation, a conservative think tank here in Austin, says it’s too bad because this was how Medicaid was always supposed to be. He says the 1965 wording of the law states that Medicaid programs will be "jointly funded, state administered."

But Anne Dunkelberg with the left-leaning Center for Public Policy Priorities points out that the program has changed a lot since the 1960s.

“Every program that Congress creates evolves constantly and is changed constantly,” she says.

Medicaid used to serve only a small group of mostly disabled people, widows and orphans, Dunkelberg said. But the program has been expanded to cover other needy populations through the decades, too.

The federal government also created rules aimed at making sure those same populations had access to care no matter where they lived.

“There is obviously a big philosophical divide as to whether or not it is acceptable in the United States to have some states where people can rely on a safety of accessible affordable health care and other states where that doesn’t have to be the case,” she says.

The argument that the safety net shouldn’t be vastly different depending on where you live has somewhat won out for the past couple of decades. It’s why states must follow rules on eligibility requirements and benefit standards.

But Waldman says all these rules have gotten out of hand and made the program unnecessarily expensive. He says if the rules don’t change along with how we pay for the program, a block grant won’t improve things much.

“If we don’t have that flexibility – that control – of the cost drivers, but we only have the money, then it really won’t work,” he says. “That’s just that simple.”

Health care advocates say getting rid of standards could allow states like Texas to further cut its program. Texas already has some of the lowest reimbursement rates for providers and it’s already really hard to get on Medicaid here if you aren’t a child or a pregnant woman.

Dunkelberg says there are a lot of unknowns, but she hasn’t heard anything from proponents of this plan that suggests they want to do anything other than cut costs. And she says she can’t get her head around what even less money will mean for Texas’ Medicaid program.