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What you should know about Trump’s Medicaid block grant plan

Published on March 31st, 2020 by Triton Benefits & HR Solutions

President Trump has been talking about transforming the Medicaid system since his 2016 election campaign. On Jan. 30, 2020, the Trump Administration finally announced its plan to turn Medicaid into a block grant.

The new system likely won't be implemented until 2021, due to controversies surrounding the plan and the federal government's tendency to move slow when approving new projects. Some lawmakers are arguing that the proposed changes are so drastic that they would need to be passed through Congress before being carried out.

Assuming Trump's block grant project goes according to plan, what will the new Medicaid system look like? To prepare for this potential transformation, it's important to understand how it could impact state governments and those who rely on federally funded health care. 

The program will give states more control over the benefits they provide

Rather than adhering to federal mandates, states will have the freedom to make certain changes to their Medicaid programs. For starters, they will be able to choose who gets to enroll and who doesn't. This means that low-income adults under the age of 65 with no children could be left out.

The states will also be able to control which benefits and prescription drugs are covered, as well as how much money enrollees have to pay out-of-pocket for different healthcare services.

The federal government will provide states with a fixed Medicaid budget

Under the current system, the federal government provides states with Medicaid budgets that will rise and fall depending on how many enrollees there are. With this new structure, in exchange for more control over enrollment and benefits, states will instead receive a fixed payment from the government to cover their individual Medicaid arrangements.

States will not be required to use the new model

It will be difficult for state governments to determine whether or not a fixed payment plan from the government will cover the needs of their Medicaid population. Some states prefer this flexibility while others would rather keep Medicaid the way it is.

Luckily, Trump's block grant will be optional. So, if they choose to, states can continue providing Medicaid benefits that are established and paid for by the federal government. 

To learn more about Trump's Medicaid block grant plan and how it could affect your business, visit us at Triton today!

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