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Health Care

Trump Releases Plan to Curb Medicaid Spending

President Donald Trump at a rally in Toledo, Ohio, January 9, 2020. (Jonathan Ernst/Reuters)

The Trump administration on Thursday released an ambitious plan to curb spending on Medicaid, the government health insurance program covering poor Americans.

The administration’s plan, “Healthy Adult Opportunity,” would allow states to apply to convert some of their Medicaid funding into block grants. The block grant arrangement allows states to accept a capped amount of Medicaid funding in exchange for more flexibility on how to spend the funds. Under the current system, the federal government matches most state spending on Medicaid each year.

The plan will “give states unprecedented tools to design innovative health coverage programs tailored to the unique needs of adult beneficiaries, while holding states accountable for results and maintaining strong protections for our most at risk populations,” the Centers for Medicare and Medicaid Services said in a statement.

The new system applies only to those who began qualifying for Medicaid under the Obama administration’s Affordable Care Act, which expanded the program to cover low-income people making less than about $17,000 annually.

Some states have griped about the current level of federal involvement in their Medicaid programs, Oklahoma, Minnesota, Arkansas, and other states, saying it creates long waits and cumbersome red tape every time a state wants to change the program to better serve patients. The federal government exercises substantial oversight since it finances most of the program.

“Vulnerable populations deserve better care. Data shows that barely half of adults on the Medicaid program report getting the care they need,” said Seema Verma, director of Medicaid.

Democrats have accused the administration of stripping health benefits from those who cannot afford them.

“Today’s announcement is the cruelest step yet by the Trump administration to slash American healthcare and dismantle basic safety net programs like Medicaid,” said Democratic Senator Ron Wyden of Oregon.

Medicaid covers about 1 in 5 low-income Americans. In 2017, about 74 million people had health insurance through the program, about 40 percent of whom were children. Medicaid spending makes up about 17 percent of total U.S. spending on health care.

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