First on the chopping block is Medicaid. The health-insurance program for low-income Americans has operated in fundamentally the same way for the last 50 years, providing federal funds to match what states pay to cover low-income people. Even with the Affordable Care Act’s expansion of Medicaid, which was adopted by most states, the basic structure of the program has remained the same: an open-ended funding commitment with few eligibility restrictions other than income.
In 2017, the GOP tried to transform that setup substantially, proposing in multiple Obamacare-repeal bills that Medicaid morph into a program with a per capita cap or state block-grant structure. In both formats, there’d be an annual increase in funding, but it would correspond to some measure of inflation, not to Medicaid’s program growth. In several House and Senate versions of repeal bills, the per capita-cap formula would have meant drastic cuts in real dollars to Medicaid’s projected funding over time. Those bills came to fruition after a years-long push from Ryan, whose “Better Way” agenda became one of the guiding forces in the Obamacare-repeal process. In that proposal, Ryan outlined his reasoning for the caps and block grants, writing that “states have asked for flexibility to better manage their states’ needs for years, and this per capita allotment proposal would ensure that reality by creating new statutory flexibilities.”
Despite the speaker’s best efforts, none of those bills passed, and most of Obamacare—sans the law’s individual mandate—survived 2017 intact. But the White House still managed to modify Medicaid. Since her appointment in February 2017, Centers for Medicare and Medicaid Services Administrator Seema Verma indicated that she would allow states much more flexibility to create more austere versions of their Medicaid programs. Specifically, they could add work requirements for eligible adults via federal-government waiver, further restricting eligibility.
Earlier this month, CMS formalized Verma’s reform ideas, announcing it would begin to approve these waivers. No previous administration had accepted similar waiver requests, with many of Verma’s predecessors claiming additional eligibility requirements fell beyond Medicaid’s statutory authority. Additional changes to state Medicaid programs now seem likely under Verma’s watch, including time limits, drug testing, real premiums, and benefit cuts.
Medicaid isn’t the only federal poverty program in the GOP’s sights. As my colleague Kriston Capps reports, the Department of Housing and Urban Development is seriously considering work requirements for people receiving housing assistance. Additionally, Ryan has expressed his desire to craft a comprehensive “entitlement reform” package this year, including major changes to the federal food-stamps program SNAP. While his Republican colleagues in Congress have blanched somewhat at the idea—fearing another prolonged fight with Democrats after losing multiple rounds of Obamacare repeal last year—pressure from states and the White House might force the issue.