Study: Medicaid block grants and per capita caps would risk families’ oral health

By: Deborah Vishnevsky

Do you ever have nightmares that just don’t seem to go away? The type where you just keep finding yourself back in some terrible scenario. 

That image might exemplify our concerns on potential plans to impose per capita caps or block grants on Medicaid. Recent state legislative efforts and federal policy rumors have us revisiting these issues. And with the release of a new report by Avalere Health, commissioned by the Children’s Hospital Association, we have even more reason to believe such a change could cause serious harm the oral health of children and families.

Throughout 2017 we saw attacks on Medicaid that would attempt to deeply cut its funding with claims of new “flexibility” for states. 

Under the current financing system, state Medicaid programs provide coverage and the federal government covers a portion of those expenses. This joint relationship means that no matter the cost of coverage, including in the event of unexpected changes like natural disasters or the approval of new, expensive treatments, the federal government compensates states for a significant fraction of the expenditure.

Whether pursued at the federal or state level, these plans would cut Medicaid funding ... putting more obstacles in the way of a family’s ability to achieve good oral health.

Switching to block grants or imposing per capita caps would fundamentally change this financing structure. Under such schemes, the federal government would instead give states a predetermined amount of funding — leaving states to bear any additional costs, even when facing the unexpected. Cutting funding for states, and waiving federal standards in the program, would only weaken children’s Medicaid coverage, benefits, and access to care. History has shown us time and again that when budgets are tight oral health programs suffer.

The new report from Avalere Health estimates how much a per capita cap or block grant plan could cut from federal Medicaid spending. It offers a view of how this would impact children nationally, and on a state-by-state basis, relative to current law.

The findings were alarming: 

  • Per capita caps would cut federal Medicaid spending on children by anywhere from $89 billion up to about $143 billion over ten years (a 14 to 22% reduction).
  • A block grant plan would cut federal Medicaid spending on children by anywhere from $110 billion up to $163 billion over ten years (a 16 to 24% reduction).

How likely are these changes? While the federal government has not yet issued any clear guidance, we’ve seen concerning developments on these plans from state policymakers.

For example, in May, Utah’s Department of Health released a proposal for a Section 1115 waiver, which would allow the state to establish a per capita cap system of limited Medicaid coverage for parents and adults. (We reported on this issue in this blog post). Earlier this year, the Centers for Medicare and Medicaid Services (CMS) approved a separate Section 1115 waiver in Utah, which partially expanded the state’s Medicaid program to cover adults up to 100% of the Federal Poverty Line (or about $25,750 for a family of four). This previously approved waiver also allowed the state’s Medicaid program to cap enrollment for adults. If the new waiver is approved, the state may impose cost-related restrictions on care, regardless of someone’s actual needs or health status. 

Cuts to oral health coverage and care have far-reaching consequences on families, including financial stress.

Also in May, Tennessee passed a law requiring the state’s Medicaid agency to submit a waiver requesting block grant funding for their program. Proponents argue that, with changes in funding, the state agency would also get certain, yet undefined, “flexibility” in how programs are run and in expectations set by the federal government.

Other states, such as Alaska, also appear to be pursuing block grant plans.

Whether pursued at the federal or state level, these plans would cut Medicaid funding. They would likely lead to reduced enrollment, lower coverage standards, and limited services — putting more obstacles in the way of a family’s ability to achieve good oral health. Evidence shows that costs remain a serious barrier to people receiving oral health care. Cuts to oral health coverage and care have far-reaching consequences on families, including financial stress. Dental disease can risk  parents’ — and ultimately children’s — employability and earning potential.

Furthermore, CMS  has itself noted that children enrolled in Medicaid are not receiving all the necessary oral health care they are entitled to. Research shows that limited access to providers continues to be a roadblock to dental care for children who count on public coverage. Block granting Medicaid or imposing per capita caps will not help states address these barriers. To put it simply: these policies will compel cuts to the program that will hurt the oral and overall health of families.

For more information on the impact of block grants and per capita caps on Medicaid, see some of our archived resources available at CDHP’s Why Dental Coverage Matters Toolkit. You can also continue to follow this blog and our Twitter feed, Facebook, or LinkedIn pages for updates and opportunities to speak up.

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Did you know?

75% }
of American Indian/Alaskan Native children have experienced caries by age 5.
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