Alaska’s Republican governor, Mike Dunleavy, is seeking federal authorization to turn the state’s Medicaid program into a block grant, a first-of-its-kind move to forgo some federal dollars in order to gain flexibility for managing the healthcare program.
“Your Medicaid administrator, Seema Verma, has urged us to be the first state to receive Medicaid dollars as a block grant,” Dunleavy wrote in a letter to President Trump. “We are eager to do this, but your support of her on this ‘first’ will keep the proper focus and speed on this application.”
The letter, which was dated March 1, was obtained and first reported by Alaska Public Media.
The federal government currently matches a percentage of what states spend on Medicaid every year and pays for the majority of costs. Accordingly, federal officials have a lot of say about how states spend Medicaid dollars. Through a block grant, the amount that the federal government spends would be capped.
States have to apply for waivers if they want to make changes to Medicaid, and Alaska would have to undergo the application progress to get approval for a block grant. From there, however, Alaska wouldn’t have to apply for as many changes when deciding how Medicaid dollars are spent.
Transforming Medicaid into a block grant has been a goal of Republicans in Congress, and was included in several Obamacare replacement ideas. It also has been endorsed by the Trump administration as a way to curb spending.
Healthcare industry groups have oppose block grants because they said they would result in cuts to Medicaid, which covers low-income people, pregnant women, and people with disabilities. Critics also have warned that states may incur costs that they don’t expect, such as the need to spend more on Medicaid on some years to care for people following a natural disaster.
