Azar says HHS talking with states interested in Medicaid block grants

The Trump administration has been in talks with states that are interested in rolling out Medicaid block grant programs, Health and Human Services Secretary Alex Azar said Thursday.

The HHS head was testifying before the Senate Finance Committee to stump for the White House’s 2020 budget proposal—which includes a call for Medicaid to be restructured into a block grant program nationwide—and said some states have inquired about block grants or per capita caps during discussions about Medicaid waivers.

Azar said he wasn’t sure how many states were involved in these talks.

“We have discussions with states where they will come in and suggest ideas,” Azar said. “It’s at their instigation.”

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No waiver requests for either block grants or per capita caps have been made public, and the Centers for Medicare & Medicaid Services hasn’t signed off on any such requests so far.

However, CMS has made clear that one of its focuses in Medicaid is allowing states to test new approaches, especially in expansion populations. That’s the impetus behind its guidance on work requirements, for example, another controversial measure.

Republicans have long called for Medicaid to be converted into a block grant program, and such a proposal was a cornerstone of the failed Graham-Cassidy plan to repeal and replace the Affordable Care Act.

The Trump administration also factored block grants into its budget proposal for 2018, modeled after the Graham-Cassidy legislation.

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Sen. Bob Casey, D-Pa., requested that Azar make conversations with state officials about block grants or per capita caps public, but the secretary demurred.

“It violates our ability to work with a government and a state as they consider different approaches,” Azar said.

Any state plan to institute block grants or per capita caps would likely face significant legal pushback, much like work requirements have. Such requirements approved in Kentucky and Arkansas were before a federal judge as Azar testified on Thursday, and a decision is expected before April 1.