There has been some buzz in the past week or so about what might happen if lawmakers push for a major shift in Medicaid funding: moving from the current dollar-for-dollar matching system to block grants. While this might sound like a harmless budgetary change, it poses serious risks to Home and Community-Based Services (HCBS) waivers, which are essential for keeping people with disabilities out of institutions. Here's what you need to know—and why this could also make life harder for family caregivers.
What Are Block Grants?
Under the current Medicaid system, the federal government matches state spending on Medicaid without a set cap. This allows states to expand services like HCBS waivers based on need, knowing federal dollars will continue to support these programs.
Block grants, however, cap the federal funding states receive, providing a fixed amount of money no matter how high the actual costs or demand may be. This creates a strong financial incentive for states to cut back on Medicaid spending—including optional programs like HCBS waivers.
Why Would HCBS Waivers Be at Risk?
HCBS waiver programs are optional. HCBS waivers allow individuals to receive care at home or in their community rather than being placed in institutions. While this is more cost-effective and better for individuals, it’s not mandatory. Medicaid must cover institutional care, but HCBS programs are optional.
In a block grant system, states strapped for cash might prioritize mandatory institutional care over HCBS waivers—even though community-based care is often cheaper in the long run. This is a relic of outdated Medicaid laws, but under block grants, it could worsen.
Block grants typically give states more control over how they run Medicaid. While this might sound good, it also means states could tighten eligibility criteria, reduce the number of waiver slots, or limit covered services.
For states like Ohio, Idaho, or Indiana, which are already pursuing policies that are hostile toward family caregivers, the "flexibility" of block grants could be a green light to impose additional restrictions or even increase Parent Penalties.
Fixed Budgets Can't Handle Changing Needs:
Medicaid demand isn’t static—it rises and falls due to factors like an aging population, medical advances, or economic changes. But a block grant wouldn’t adjust to meet those needs, leaving states with tough choices if demand increases.
To stay within a fixed budget, states might:
Further limit the number of people who can get waivers.
Slash reimbursement rates for providers.
Expand waitlists for HCBS waivers.
Ban legal guardians, spouses, and/or parents of minors from working as direct service professionals, labeling their round-the-clock care as “natural unpaid support”
Why It Matters
Medicaid block grants might sound like a bureaucratic tweak, but they represent a fundamental shift in how healthcare for vulnerable populations could be funded. By capping federal dollars, block grants would create financial pressure that could decimate optional services like HCBS waivers.
For family caregivers, who often sacrifice income and careers to care for loved ones around the clock, this idea represents more than a policy change—it would pose a direct threat to their ability to keep their families together and provide the care their loved ones need.
The Bottom Line
If Medicaid moves to block grants, the financial incentives for states to cut optional services like HCBS waivers will grow. This could lead to longer waitlists, more institutionalization, and even greater challenges for family caregivers.
To protect these vital programs and the families they serve, it’s essential to push back against policies that put cost-cutting ahead of people’s lives and well-being.
Comments