Trump’s Medicaid reform plan: 5 things to know

States would be allowed to transfer a portion of Medicaid funding into block grants

The Trump administration unveiled a new initiative this week, aimed at giving states more flexibility when it comes to their Medicaid programs.

Continue Reading Below

The key component of the plan – called the Healthy Adult Opportunity – is block grants, which are intended to allow states more freedom in distributing coverage along with cost-saving options.

Medicaid provides health coverage for low-income and disabled individuals. In 2018, Medicaid spending grew by 3 percent to $597.4 billion, accounting for 16 percent of total national health expenditures, according to the Centers for Medicare and Medicaid Services.

SANDERS' MEDICARE-FOR-ALL PLAN TO BOOST HEALTH, BUT MAY WALLOP ECONOMIC GROWTH: ANALYSIS

Conservatives have been in favor of imposing block grants – including in a 2017 Republican-proposed health care bill. President Trump also proposed grants in his budget for fiscal 2020.

Critics, however, say it could limit the number of people covered by the plan.

Here’s what you need to know about the Healthy Adult Opportunity:

Funding

The plan allows states to transfer a portion of Medicaid funding into block grants – which would be given to states to cover the program as they see fit.

Currently, states get open-ended matching funds for Medicaid.

A block grant would be given to states in a lump sum, based on how much a state pays for the program.

Who may be affected?

The focus of the program is adults under the age of 65 who are not disabled and are not eligible under a state plan. Millions of people who obtained coverage through ObamaCare’s Medicaid expansion could be impacted. Nearly 75 percent of states expanded the program under the Affordable Care Act, which was largely financed by the federal government.

WHO TO AGAIN CONSIDER IF CORONOAVIRUS IS A GLOBAL EMERGENCY

Children and individuals needing long-term care who are age 65 and over would not be affected, according to the government.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

What states will be affected?

All states are eligible to take advantage of the option. At least a couple of state lawmakers, including in Alaska, Georgia, Tennessee and Oklahoma have expressed interest, as reported by The Wall Street Journal. States would have to get approval from the federal government to partake.

Conservative-leaning states that are looking to limit spending are those perceived as most likely to be interested in the program.

What could be cut?

Most federally approved drugs are currently covered by Medicare.

However, under the new program, a state could limit drug coverage for different conditions, according to Kaiser Health.

States would also be allowed to set premiums, though the threshold for out-of-pocket patient spending is 5 percent of household income.

Challenges are expected

Democrats have opposed block grants, arguing that they could hurt low-income people. But they are also likely to argue that the administration doesn’t have the authority on its own to cap spending without congressional approval.

CLICK HERE TO READ MORE ON FOX BUSINESS