Block grants are all the rage. Take the latest G.O.P. proposal to repeal and replace the Affordable Care Act: the Graham-Cassidy bill. It proposes to replace the current system and instead give grants to the states, essentially taking the funds the federal government now spends under the ACA for premium subsidies and Medicaid expansion and give those funds to the states as a lump sum with little regulation.
There is a complicated formula by which the bill proposes divvying up this money among the states. Many think the formula is unfair, that it benefits red states over blue states, and that it just flat isn’t enough money. These are incredibly important concerns. But let’s put them to the side for just a moment and consider the theory behind block granting. Is there any world, for instance assuming that the amount and allocation of the funding could be resolved (probably crazy talk), in which switching to block granting may actually improve upon the status quo?
Proponents of block granting health care make two main arguments. First, it will reduce costs. By block granting Medicaid and the ACA subsidies, we end the blank check open entitlement that these programs have become and give states more skin in the game. Second, these cost savings will come from empowering states to innovate. States will become more efficient, improve quality, and solve their own state-specific problems.
These arguments have an understandable appeal. But how will states really react to providing health care coverage on a budget? Continue reading
By Wendy Netter Epstein
The cost-sharing reduction payments are an essential component of the ACA. These payments reduce out-of-pocket costs for lower income enrollees so that individuals can actually use their insurance coverage and not be prevented from seeking care because of a high deductible or a copay they can’t afford. President Trump has been threatening since he took office to end these payments. And there is at least some possibility that he has the authority to do (see House v. Price).
Politically speaking, Trump’s goal in threatening to end these payments is either to hasten what he sees as the inevitable demise of Obamacare—or at least to use the threat of ending the payments to hold the feet to the fire of those who have resisted “repeal and replace.” Either way, Democrats have widely condemned Trump’s threats and the instability they cause in the market. Continue reading
Wendy Netter Epstein is joining Bill of Health as a regular contributor.
Professor Epstein is a Visiting Associate Professor at the University Chicago Law School, and an Associate Professor of Law and Faculty Director of the Jaharis Health Law Institute at the DePaul University College of Law. She is a graduate of Harvard Law School, where she was editor-in-chief of the Journal of Law, Medicine & Ethics, Recent Developments. Prior to starting her academic career, Professor Epstein was a partner in commercial litigation at Kirkland & Ellis LLP, concentrating on health industry clients. Professor Epstein’s teaching and research interests focus on health care law and policy, contracts, and commercial law. Her work takes an interdisciplinary approach, applying both law and economics and behavioral science principles to problems negatively impacting vulnerable parties. In 2017, Professor Epstein won both the University-wide and law school Excellence in Teaching Awards at DePaul University.