Democrats face uphill battle against Trump’s Medicaid overhaul

Democrats are vowing to fight the Trump administration’s new plan to let states turn some of their Medicaid funds into a block grant, but blocking the overhaul will be a challenge.

The program — branded as the “Healthy Adult Opportunity” — will allow states to ask permission for a waiver to end their traditional, open-ended Medicaid program and put hard caps on how much money states and the federal government will spend on the poor and disabled. 

States would be allowed to impose work requirements, cut provider payments and require cost sharing and premiums without additional permission from the federal government.

Imposing block grants in Medicaid has long been a major conservative goal, and with time running down in President Trump’s first term, the administration is facing pressure to approve a plan lawmakers and advocates argue may not be legal without congressional approval.  

“After being stopped in the Congress from repealing the health care law and destroying the lifeline of Medicaid, the Trump Administration has decided to ignore the law and steal lifesaving health care from seniors and families anyway,” House Speaker Nancy Pelosi (D-Calif.) said Thursday.

Congress already rejected block grants when the GOP’s ObamaCare repeal bill failed in 2017. Allowing states to impose those same changes by statutory waiver would be extremely controversial.

“The Administration’s actions are illegal,” said Rep. Debbie Dingell (D-Mich.). “We will fight the Administration’s attempt to weaken Medicaid and protect the healthcare and support of those who depend on it.”

But Democrats’ options are limited if they want to pass legislation to stop the block grant plan.

Any bill passed in the House to stop the plan would likely never make it through the GOP-controlled Senate. 

“If Democrats are serious they don’t like the tone [of the policy], there will be one more must-pass bill to make some language that would stop this. They have that ability,” said Joe Antos, a health care expert at the conservative-leaning American Enterprise Institute. 

“They won’t be able to do it, but if they’re complaining they’re in charge, they should do it,” Antos added. 

On Friday, Democratic leaders said they would vote on a resolution next week to disapprove of the block grant plan.

“Congress has a responsibility to protect Medicaid beneficiaries from the harm that would be caused by this new guidance,” Pelosi and House Majority Leader Steny Hoyer (D-Md.) said in a statement. “The goal of this new waiver is clear: reduce access to health care for millions of low-income Americans, including access to affordable prescription drugs. The Democratic-led House will not allow this challenge to health care access in our country to go unanswered.”

But any tougher measures to stop the Trump administration’s block grant plan could imperil other bipartisan health efforts members want to pass this year. 

Lawmakers have a May 22 deadline to fund extensions of several Medicare and Medicaid programs, including funding for community health centers. They are using that deadline to spur bipartisan negotiations on legislation to fix surprise medical billing.

Lawmakers came close to passing the bill as part of the year-end spending package in December, but it was derailed due to differences among competing House committees. 

House Democrats tried a similar tactic in May when they combined a package of three bipartisan drug pricing proposals with measures that would roll back Trump administration policies meant to undermine ObamaCare.

Democrats wanted to force Republicans into a difficult vote on the health care law, in an attempt to solidify the political advantage that won them control of the House in 2018. The maneuver prompted major protests from Republicans, who accused Democrats of playing politics with drug prices, and killing bipartisan goodwill. 

The bills passed the House almost entirely along party lines, with just five Republicans voting in favor. The Senate eventually passed just one of the three bills, without the ObamaCare provisions.

Instead of legislation, the best relief for opponents of the block grant plan will likely be found in the courts. 

Previous Trump administration attempts to let states make conservative changes to Medicaid have run into judicial roadblocks. 

For example, the Centers for Medicare and Medicaid Services (CMS) has approved work requirements in 10 states. But a federal judge has blocked implementation in some states, and others have put implementation on hold, or suspended them indefinitely, due to the uncertainty and cost of federal lawsuits.

The block grant plan is likely to run into similar problems.

“If a state pursues it, they will be walking themselves right into litigation,” said Jocelyn Guyer, managing director at Manatt Health.  

Jane Perkins, legal director of the National Health Law Program, which sued the administration over Medicaid work requirements in five states, said they were “carefully investigating” and evaluating their litigation options.

“The document issued today by CMS appears to re-write bedrock provisions of Medicaid, an activity which is beyond the scope of CMS’s power. Only Congress is tasked with making these changes,” Perkins said in a Thursday statement.

Guyer said given the hesitancy over work requirements because of lawsuits, she would be surprised if many states apply for the block grant opportunity.

“The experience of work requirements brought home to everyone that it will be time-consuming and expensive,” Guyer said. 

She added that the stakes are even higher for block grant litigation than for work requirements.  

“The block grant policy feels like more of a dramatic change than work requirements, because it goes to the very core of fiscal partnership between states and the federal government,” Guyer said.