What would Medicaid block grants and per capita caps mean for Kentuckians?
Block Grants and Per Capita Caps Will Have Devastating Impacts
These proposals are especially dangerous because the reductions in federal spending will be so dramatic that the cost of reversing the policies will likely be insurmountable and the changes states make to accommodate the changes in funding irreversible.
Kentucky will face significant budget challenges as a result of dramatic reductions in federal funding
Speaker Ryan’s 2012 House Republican budget plan proposed to reduce federal Medicaid spending to Kentucky by 22% through block grants. Deep federal cuts under block grants or per capita caps will place a significant strain on Kentucky as we struggle to figure out how to insure our low-income populations with reduced resources.
• Reduced federal funds will force our state to make difficult decisions when budgeting and they may be forced to choose between making cuts to Medicaid and other important areas like education.
• Per capita caps and block grants will lock our state in at current funding levels, reducing flexibility and making it difficult for us to adjust to changes in our state or to alter the Medicaid program as we see fit in the future.
• By forcing states to cut or cap Medicaid eligibility, per capita caps and block grants will likely increase the number of uninsured in Kentucky thus increasing the burden of uncompensated care costs on state and county budgets.
• A per capita cap or block grant would be a tremendous cut to the approximately $1.5 BILLION in current Medicaid expansion revenue that is flowing into the state. It would also increase the burden of uncompensated care to hospitals and other providers, who are currently saving approximately $1.6 BILLION annually due to Medicaid expansion.
Fewer Kentuckians will have coverage
Due to budgetary constraints resulting from the decrease in federal Medicaid funds, Kentucky is likely to be forced to make eligibility changes such as:
● Eliminating entire eligibility categories, such as childless adults.
● Decreasing income eligibility levels, leaving previously covered low-income populations now ineligible for coverage.
● Establishing waiting lists and enrollment caps, meaning that not every individual who meets eligibility criteria will receive coverage.