CMS Invites States to Innovate With Fixed Medicaid Funding
After months of languishing at the Office of Management and Budget, CMS’s long-awaited state Medicaid director letter addressing so-called block grants appeared on Jan. 30. But the revised 56-page “Healthy Adult Opportunity” guidance made no mention of block grants — which Democrats have long argued are harmful and illegal if applied in entitlement programs — and instead presented states with two options for covering a subset of Medicaid enrollees via a fixed budget with additional program flexibilities. Safety net insurers and Medicaid advocates worry that if implemented, such options could restrict certain “able-bodied” adults from maintaining coverage, while analysts predict such coverage losses would be minimal.
CMS in June had submitted the guidance under the name “State Medicaid Director Letter: Medicaid Value and Accountability Demonstration Opportunity” but pulled that version in November and replaced it with a letter extending a new Section 1115 waiver opportunity to “provide cost-effective coverage using flexible benefit designs under either an aggregate or per-capita cap financing model for certain populations.”