Medicaid Block Grants Could Do ‘Irreparable Damage’ to Safety Net of Family Planning Providers

Because block grants essentially cap how much the government allocates each year to states, restructuring the program in this way could also hinder a state’s ability to deal with a public health crisis or an economic downturn should one arise.

Given the critical role Medicaid plays in publicly funded family planning in the United States, cutting back on the program at large would likely reduce funding for reproductive health care on a state level. John Moore/Getty Images

When then-Republican presidential nominee Donald Trump penned a letter to anti-choice activists urging them to support his campaign, he included a promise to defund Planned Parenthood. Weeks before Trump’s inauguration, Republicans in Congress began taking steps to remove the reproductive health-care provider from federal funding programs through a budget reconciliation process. Now Republican efforts to restructure Medicaid into block grants could help make that a more permanent reality.

Doing so would give Republicans in both state legislatures and the U.S. Congress, who were already eager to defund Planned Parenthood, the opportunity to eliminate the provider from Medicaid, but experts say the devastating effect on reproductive health could go far beyond that.

Medicaid is a joint federal and state program that currently serves almost 75 million people and is the “single largest source of health coverage in the United States,” according to Medicaid.gov. That includes half of all people with low incomes, two in five children, and two in five people living with disabilities. As an “entitlement,” anybody who qualifies for the public health insurance coverage is guaranteed to be accepted into the program. “It also means that states have guaranteed federal financial support for part of the cost of their Medicaid programs,” according to the Center for Budget and Policy Priorities (CBPP). To get that federal funding, states must agree to cover “mandatory” populations such as pregnant women whose incomes fall below 133 percent of the poverty line—though who qualifies beyond the federal government’s minimum standards varies from state to state and depends on whether a given state expanded their program through the Affordable Care Act.

In addition to its general role in ensuring those with low incomes can get the care they need, Medicaid also plays a crucial part in access to family planning services. What this means varies from state to state, but Audrey Sandusky, the director of advocacy and communications at the National Family Planning & Reproductive Health Association (NFPRHA), told Rewire it typically includes services such as contraceptive counseling and care—including a full range of contraceptive methods—as well as screenings for sexually transmitted infections (STI) and cancer.

The program has been the primary public funding source for family planning “since the 1980s, particularly in states that have expanded their Medicaid eligibility for family planning,” according to NFPRHA. As the Guttmacher Institute notes in a September 2016 fact sheet, “Medicaid accounted for 75% of 2010 expenditures on family planning, state appropriations accounted for 12% and Title X for 10%. Other sources, such as the maternal and child health block grant, the social services block grant and Temporary Assistance for Needy Families, together made up 3% of [public] expenditures.”

But health-care policy experts say Republican plans to reform Medicaid could have a major impact on the provision of family planning services.

Last month, House Republicans released an outline of a so-called plan to repeal and replace the Affordable Care Act. It included a component that would give states the option to block grant Medicaid. Though a concrete plan complete with policy has yet to publicly emerge, Republican leaders like House Speaker Paul Ryan (WI), Health and Human Services Secretary Tom Price, and President Trump himself have backed versions of a block grant.

Under a block grants system, the federal government would set aside a fixed amount of money for Medicaid for each state to decide what to do with. Doing so “would institute deep cuts to federal funding for state Medicaid programs,” according to the CBPP. An analysis of Republican health-care proposals published by the Center for American Progress last year noted previous estimates found “that past House Republican block grant proposals would have eventually resulted in 14 million to 20 million Medicaid beneficiaries losing coverage.”

Given the critical role Medicaid plays in publicly funded family planning in the United States, cutting back on the program at large would likely reduce funding for reproductive health care on a state level. The federal government currently employs a 90 percent match rate for states’ funding family planning services through the program. That means that the federal government matches 90 percent of what a state pays from its own Medicaid funding buckets for family planning. “Presumably in a block grant that kind of an incentive to offer family planning services would be gone,” said Diane Rowland, executive vice president at the Kaiser Family Foundation, during a January press briefing on the entitlement program.

Reproductive health-care advocates and organizations roundly condemned such changes in a May 2011 letter responding to such a plan in the House Budget Committee budget for 2012. The National Family Planning & Reproductive Health Association, the American Congress of Obstetricians and Gynecologists, the Association of Reproductive Health Professionals, the Center for Reproductive Rights, the National Partnership for Women & Families, Planned Parenthood Federation of America, among others, said the plan would force “many poor and low-income individuals to go without care or to seek care in our nation’s emergency rooms, resulting in increased health care costs.”

The organizations noted the key role that publicly funded family planning services—which Medicaid is the largest source of funding for—play in reducing unintended pregnancies.

“In 2014, publicly funded family planning services from all sources (including safety-net centers and private doctors who accept Medicaid) helped women to avoid about two million unintended pregnancies, which would have resulted in nearly one million unintended births and nearly 700,000 abortions,” according to the Guttmacher Institute.

Adam Sonfield, senior policy manager at Guttmacher, explained in a January interview with Rewire that under block grants, “fewer people would have Medicaid most likely, and those that do would probably have less comprehensive coverage. And that’s clearly a bad thing when it comes to health care generally and reproductive health specifically.”

If Medicaid were restructured to block grants, states would also have more flexibility to determine which services they want to cover. That “would likely give states more ability to cut back on specifically on the reproductive health services they provide,” said Sonfield.

Though public insurance in most states currently covers many related services such as Pap smears and STI testing, “given some of the hostility we’ve seen in some states towards reproductive health care and coverage, if states had the flexibility to not include family planning services,” to charge copayments and deductibles for them, or to limit provider choice, Sonfield suggested some are likely to do so.

Sandusky, whose organization represents both family planning providers and administrators, noted that Medicaid “underpins the ability of our providers to deliver care.” She said restructuring the program to a block grant could mean “an untold number of people will not be able to see their provider of choice, either because they will have to pay out-of-pocket, or health centers would have to close their doors.”

That “would do irreparable damage to the safety net at a time when demand for publicly funded family planning continues to grow,” said Sandusky.

While most Medicaid enrollees are currently allowed to seek family planning care at any provider they want—including those that are out of network—giving states more flexibility to decide on their own rules could mean that changes. “We certainly have seen several states try to get rid of the freedom of choice protection,” said Sonfield. “States have been targeting that provision, particularly around Planned Parenthood and other [clinics that] provide abortion services without federal dollars.”

In late February, a federal court in Texas issued an injunction against the state’s attempt to do just that. The order temporarily halted state lawmakers from cutting Planned Parenthood out of the state’s Medicaid program. As Rewire Vice President of Law and the Courts Jessica Mason Pieklo explained, “The fight over Planned Parenthood funding in Texas centers on Medicaid’s ‘free choice of providers’ requirement. In other words, Medicaid recipients have the right to choose among a range of qualified providers without government interference.”

Lawmakers in Texas attempted to use a discredited anti-choice group’s deceptively edited videos to justify removing Planned Parenthood from the program. Though the Texas court may have ruled against the state’s attempt, “the new presidential administration means other states have new motivation to keep trying to use Medicaid as a vehicle for defunding Planned Parenthood,” wrote Pieklo.

The more restrictions on services and providers that are put on the program, “the harder it would be for Medicaid enrollees to make use of their coverage the way everyone else makes use of their insurance coverage, to meet their own health-care goals—including their reproductive health-care goals,” Sonfield said.

Given the efforts of Congress in the past, Alina Salganicoff, director of women’s health policy at Kaiser Family Foundation, told Rewire in mid-February it was possible “they [could] put in language into the Medicaid block grant limiting participation of providers that also provide abortion services.”

Though she stressed it’s difficult to predict specifics without any actual legislation or detailed proposals, “Congress has shown intense interest in eliminating Medicaid as a source of funding for Planned Parenthood,” she said.

Like the lawmakers in Texas, Republicans around the country have spent years embarking on a massive crusade to undercut and eliminate funding for Planned Parenthood. Efforts by the discredited Center for Medical Progress to smear the provider only served to ramp up the GOP’s efforts, even as countless investigations turned up no evidence of wrongdoing.

While the Obama administration repeatedly moved to block Republican efforts to defund Planned Parenthood, a Trump administration has given the GOP renewed hope for accomplishing their goals. House Republicans moved just weeks ago to overturn Obama’s efforts to safeguard funding for family planning providers.

Those attacks are likely only the beginning, and Medicaid reform may be the way to help the party achieve its goals. Sandusky said that her organization is “absolutely anticipating major threats to the safety net either through provider restrictions or funding cuts or a fundamental restructuring of the Medicaid program.”

Because block grants essentially cap how much the government allocates each year to states, restructuring the program in this way could also hinder a state’s ability to deal with a public health crisis or an economic downturn should one arise.

“Under the current financing structure federal funds are tied to actual costs, program needs and state policy decisions,” explained Robin Rudowitz, an associate director for the Program on Medicaid and the Uninsured at the Kaiser Family Foundation, in a January issue brief. “If medical costs rise, more individuals enroll due to an economic downturn or there is an epidemic (such as HIV/AIDS) or a natural disaster (like Hurricane Katrina), or new treatments (like drugs for hepatitis C), Medicaid can rapidly respond and federal payments automatically adjust to reflect the added costs of the program,” wrote Rudowitz.

That may not be the case anymore with block grants. “Currently, the federal government and states share in those unanticipated costs,” wrote CBPP’s Edwin Park in a brief for the organization. “Under a block grant, however, states alone would bear them.”

Though some Republicans, as NPR put it, “have advocated block grants as a way to cut the Medicaid costs”—a claim unsupported by evidence—what they’re really talking about is taking away patient’s access to essential health care. While we may not have enough details about the party’s supposed “plan” to change the program to know exactly how it may play out, it’s clear that regardless of how they do it, block grants could open the doors to millions of people losing their access to critical reproductive health care.