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Pallone to Azar: Block Granting Medicaid is Illegal

Jun 27, 2019
Press Release
“Capping the Medicaid program would result in reduced or loss of benefits for individuals, loss of coverage, and imperil the financing of critical health care providers.”

Energy and Commerce Chairman Frank Pallone, Jr (D-NJ) sent a detailed letter to Health and Human Services Secretary (HHS) Alex Azar today reminding the Secretary that the Department does not have legal authority to implement a block grant or per capita cap on the Medicaid program.  The letter follows reports that the Trump Administration is actively considering approving waiver requests from Republican-controlled states to implement block grants or per capita caps on their Medicaid programs, which, if implemented, would threaten access to health care for millions of Americans across the country.

“As the Chair of the Committee on Energy and Commerce with jurisdiction over Medicaid, it is my responsibility to ensure that the program is administered in compliance with federal law,” Pallone wrote to Secretary Azar.  “The plain language of the statute prohibits the Secretary from approving a waiver that requests a block grant or per capita cap in Medicaid through a cap on federal funds.” 

Pallone continued, “Legislative history and the Administration’s own budget acknowledge that converting Medicaid to a block grant or per capita cap would require a statutory change.  Other changes that allow states to develop their own caps are similarly outside your authority.  Accordingly, it is troubling to learn that you are putting your radical agenda ahead of your responsibility to implement the law faithfully.” 

The President’s budget request estimates that such a change would cut $1.4 trillion from Medicaid over 10 years, threatening access to services for children with complex medical needs, people with disabilities, seniors, and others who rely on Medicaid.  The American Hospital Association has said the deep cuts from such a proposal “would reduce federal Medicaid funding to unsustainable levels,” and “will have serious negative consequences for communities across America.”

As part of his inquiry into the Administration’s secretive efforts, Pallone included a series of questions requesting information on the Administration’s ongoing work to implement Medicaid block grants or per capita caps, which is referred to within HHS as the State Medicaid Director Letter: Medicaid Value and Accountability Demonstration Opportunity.  According to press reports, the letter to state Medicaid directors is intended to provide a roadmap to Republican-led states on how to gain approval from the Trump Administration on their requests to cap their Medicaid programs.  Pallone requested responses to his questions by July 15, 2019. 

Letter to HHS available HERE.