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WASHINGTON -- The Trump administration Thursday offered states more control over Medicaid spending for some of their poorest residents, but first governors must accept a limit on how much the feds kick in.
That's a potentially tricky deal for states facing rising costs in the federal-state health program for low-income people. Republican governors in Oklahoma and Arkansas welcomed the offer, but it's unclear how many states will take it up.
With President Donald Trump already getting poor marks from the public for his handling of health care, the Medicaid plan is likely to provide more election-year talking points for Democrats. It dovetails with Trump administration efforts to restrain spending on other programs that help the poor, including food stamps and housing assistance.
Seema Verma, head of the Centers for Medicaid and Medicaid Services, said the idea behind the administration's "Healthy Adult Opportunity" is to improve the quality of care for the poor while controlling costs.
But the American Medical Association and a professional society representing cancer doctors warned against limits on Medicaid financing, and advocates for low-income people said the administration wants to weaken the social safety net.
Prominent Democratic lawmakers suggested Trump doesn't have the legal authority to make states such an offer, and a public advocacy law firm said it's weighing a lawsuit.
As unveiled by Verma, the complex block grant proposal would be a first step to changing a longstanding financial arrangement between Washington and the states. The federal share of Medicaid is now open-ended, meaning that a state is at least partly protected from unpleasant surprises like a new, $300,000 prescription drug or an economic downturn that swells enrollment.
Outlined in a letter from Verma to state Medicaid directors, the deal is optional for states. To get it, they'd have to apply for a federal waiver.
Its scope would be restricted to coverage for so-called "able-bodied" adults under 65. A state could not put nursing home residents, disabled people, or very low-income pregnant women and children into the new plan. The federal government would not limit its Medicaid contribution for these groups, considered the most sensitive.
"Our focus … is to change the whole paradigm and to reset the framework of how we're working with states," said Verma. "We are providing them this up-front flexibility and the federal government is in the role of monitoring the program."
In exchange for operating under a fixed federal allocation, states, among other things, would be able to:
— Limit what prescription drugs and benefits will be covered, within certain guidelines.
— Waive a current Medicaid benefit that allows a low-income person to get retroactive coverage for medical care going back three months.
— Use copays to steer Medicaid recipients to services that are deemed to have the highest value.
— Share in savings with the federal government, under certain conditions.
— Require Medicaid recipients to work, get schooling and training, or volunteer in their communities.
One potential twist is whether GOP-led states that have refused the Affordable Care Act's Medicaid expansion would be more receptive under the terms proposed by the administration. For example, Oklahoma voters will get to decide on a Medicaid expansion ballot initiative this year, and Republican Gov. Kevin Stitt has expressed interest in a block grant as part of an alternative approach.
Stitt spoke at the formal presentation of the Trump plan, calling it a "game-changer" and saying his administration will get to work immediately on its proposal.