Trump administration approves controversial changes to Tennessee’s Medicaid program

The Trump administration on Friday approved a request from Tennessee that would allow the state to receive Medicaid funding through a block grant, a change critics argue will lead to cuts to the health care program for low-income individuals.

The change would give Tennessee more authority to make changes to its Medicaid program, which is jointly run by each state and the federal government.

The approval marks the first time a state has been allowed to receive Medicaid funding through a block grant. It must be approved by Tennessee’s state legislature.

“This is not based on the state spending less money in its Medicaid program,” said TennCare Director Stephen Smith in a call with reporters. “There are no cuts to eligibility, no reduction, benefits, no reduction to services, and no reductions to what we pay our providers.”

If signed off on by Tennessee’s state legislature, the approval would last 10 years.

President-elect Joe Biden (D) opposes block grants and would have the authority to reverse the approval of Tennessee’s waiver once he takes office, though it would not be immediate.

Typically the federal government matches what states spend on Medicaid. Under a block grant structure, Tennessee would receive a fixed amount of funding instead.

Democrats oppose block grants, arguing it incentivizes states to spend less on needed health care services.

Seema Verma, the administrator of the federal government’s Centers for Medicare & Medicaid Services (CMS), said the state would lose some funding if enrollment dips below 1 percent of its baseline, “erecting an important safeguard against a state attempting to save money by reducing enrollment.”

The state would also receive more funding if enrollment grows.

Any savings the state achieves through the program would have to be reinvested in other health programs, according to the waiver.

Updated at 2:21 pm.