Q&A: Federal Government Proposes Block Grants To Fund Ohio Medicaid

The Trump Administration is encouraging Ohio and other states to adopt a new federal proposal that would cap Medicaid spending and potentially save money.

State lawmakers have not indiciated if Ohio's Medicaid program will embrace block grants as an alternate way to pay for the health insurance program.

Proponents say the block grants will provide more flexibility for states. Critics say the plan, which was rolled out last week, would simply pass costs along to low-income recipients and might discourage them from getting medical care.

Morning Edition host Amy Eddings talked with ideastream health reporter Marlene Harris Taylor about how the new payment method would work.

The Healthy Adult Opportunity proposal will give a huge chunk of money once a year to states like Ohio. It is called a block grant, or a capped amount of dollars, to states like Ohio to help pay for Medicaid. How is that different from the way it is paid for now?

Right now, the state pays about 10 cents for every dollar spent on a non-disabled adult age 65 and younger on Medicaid. The remainder is covered by the federal government budget.

So what would change? Currently, Ohio gets to wait and see how many people are actually using Medicaid because it can change each year. Ohio had nearly three million people enrolled in Medicaid last year, so it could ask for reimbursements to help cover the health costs under the program.

In this new approach, states must estimate – up front – how many people will probably use Medicaid. If the estimate is wrong, the state is on the hook to make up the difference.

So why would Ohio, and other states, consider switching to this voluntary program?

Rea Hederman, vice president of policy at The Buckeye Institute, said this program would offer more flexibility. Ohio officials would have more control over the design of the program and it would allow the participants to share in paying for their Medicaid health plans, Hederman said.

 “Ohio has pursued cost-sharing arrangements before in Medicaid wavers, such as the Healthy Ohio Program," Hederman said. "This is a way that these healthy, working age recipients could pay or contribute a small amount of their income to help offset Medicaid – help pay for premiums, and prepare them hopefully for transitioning into private coverage," he said.

This proposal would only apply to people who joined the rolls after the 2014 Medicaid expansion in Ohio under the Affordable Care Act, he said. It would not apply to groups who were already Medicaid-eligible before, such as elderly and disabled Ohioans, Hederman said.

Ohio should consider the switching to the new payment model, he said.

So Hederman thinks cost-sharing is a good. What’s the opposing view?

This new program could not only open the door to co-pays for doctor visits, it could also usher in co-pays for prescription drugs for Medicaid recipients, said Loren Anthes, Medicaid policy analyst for The Center for Community Solutions.

The proposal could also lead to denial of coverage for some drugs, Anthes said.

“Think about it if you are a person who is lower income, or who just went through a crisis at home, " Anthes said. "Maybe you lost your job or maybe you had to move or maybe your kid got sick.  A lot of people, in our community and across the state of Ohio in particular, are still facing significant issues with poverty. Regardless of our thoughts about the economy generally, that’s just the truth. Essentially what we are doing is, we're making it harder for people to access those services,” he said.

When people delay going to the doctor because they cannot afford a co-pay, they often end up using more costly forms of healthcare later, such as emergency rooms, he said.

What is Gov. DeWine saying about this? Is Ohio considering this change?

The governor’s office directed me to the Director of Ohio Medicaid, Maureen Corcoran, for comment. In a written statement, Corcoran indicated the state is leaving the door open to the program.

“The block grant program released [Jan. 30] by the Centers for Medicare and Medicaid Services (CMS) demonstrates the federal government’s openness to try new approaches to supporting our members,” Corcoran said. “CMS has been a partner to Ohio Medicaid as we work through program improvements and move toward a re-imagined, person-focused health care delivery model for Ohio’s 2.7 million members.”