Block Grants for Medicaid: The Pink Slime of Health Policies

Over the past two months, we have learned about the beef industry’s supposed attempts to reduce bacterial contamination in our meat through the use of “pink slime,” a filler made with the trimmings of cow parts and treated with ammonium hydroxide.  Some have argued that the use of this processed paste demonstrates the meatpacking industry’s commitment to addressing food safety.  But consumer advocates, pointing towards findings that bacteria remain in these meat products, argue that pink slime provides just another way to cut corners and turn over a profit.  The pink slime controversy raises serious questions about allowing industries to develop and distribute consumer products with the expectation of complacent consumption, regardless of the products’ risk or potential harm. 

Sadly, over the past two months, I have had similar concerns about federal policymaking regarding Medicaid, where pink slime is being pushed on the public in the form of substandard health policies.  Both the “Ryan Budget” plan passed by the House last month and the budget proposal pushed by Senator Pat Toomey call for repealing the Affordable Care Act and turning Medicaid into a system of block grants.  Under these proposals, federal support for Medicaid would be frozen to a fixed amount of money allocated for each state, regardless of whether the state were to suffer a natural disaster, economic downturn, or other unforeseen catastrophe.  Medicaid would also lose $810 billion and one third of its federal funding by 2022.  To make matters worse, there is a proposed cap on federal spending for Medicaid, which means there would be less and less support to cover the costs of health care services for poor working families. 

These supposedly “safe and sound” products of budget policymaking are disastrous for our children’s health. A block grant system coupled with spending caps erodes federal support for Medicaid, thus leaving states to their own devices on determining who is eligible for health care, what benefits to provide, and how to fund health care for poor working families.  While proponents may trumpet these changes as “flexibility” for states, block grants and spending caps are really just federal pink slime products that would give rise to even more pink slime at the state level. 

Currently, Medicaid and the Children’s Health Insurance Plan (CHIP) provide access to health care for about 30 million children, who represent just over half of those enrolled in Medicaid.  Under a block grant system, the 4.6 million children who received health insurance through Medicaid/CHIP at the beginning of the current recession would have no coverage because there would not have been federal funding to support them.   The current system of federal funding for Medicaid allows states the flexibility to continue offering health care to eligible families, during good times and bad.  Block grants would allow states to deny health insurance to needy working families.  During times of trouble, more children and families will be left out in the cold, without health care, because of eligibility restrictions.  Under the Ryan Budget, the Urban Institute estimated that somewhere between 14 million and 27 million people would be dropped from Medicaid by 2021.  Because that proposal also repeals the Affordable Care Act, an additional 17 million people would no longer get health insurance coverage through the expansion of Medicaid. 

Even for the few families that still qualify for Medicaid in a block grant system, budgetary restrictions will reduce the quantity and quality of the health benefits available to their children.  Currently, Medicaid and CHIP are required by law to offer comprehensive coverage for children as laid out by the Early Periodic Screening, Diagnosis, and Treatment (EPSDT) rules.  This means Medicaid coverage currently includes vaccinations, developmental screenings (including screening for autism, speech delay, learning disabilities, and other manageable conditions), preventative check-ups, sub-specialist and hospital care, and chronic disease management.  For poor working families, like the ones I care for in southeast Washington, DC, this broad range of services is vital because low-income children have more complicated health care needs and are more vulnerable than higher-income children with private insurance.  Under a block grant system, states would not be required to provide high quality, comprehensive care, and many states would reduce their Medicaid/CHIP benefits to a pink slime of services in order to cut costs.  Many states are already cutting Medicaid reimbursements to health care providers to “pink slime” rates, and this trend would worsen under a block grant system.  Altogether, these policies will lead to millions of children suffering unnecessarily because their health problems, (like asthma, autism, birth defects, sickle cell disease, and so on), receive insufficient preventative care, inadequate chronic disease management, and unreliable access to primary care and sub-specialists. 

A block grant system for Medicaid is supposed to alleviate the federal deficit and give states greater flexibility in reducing their health care costs.  However, block grants would create more lingering problems than solutions.  Just because children and families are restricted from joining Medicaid, and just because those who would still be eligible are restricted from comprehensive services, it does not mean all of those healthcare needs disappear.  If anything, the healthcare needs of poor American families will grow and become more expensive for the country, because families will use emergency rooms for problems that could have been more effectively managed (and prevented) by better primary care.  Every child who lacks health insurance costs an average of $2,100 more per year to a local community than a child with Medicaid or CHIP.  Every child with insufficient coverage is similarly expensive.  These facts should cause alarm for child health advocates and deficit hawks alike. They demonstrate that block granting Medicaid is an ineffectual health policy solution being passed off as a good one, leaving states with more fiscal challenges than they currently face.   

When the meatpacking industry sells us pink slime, what really angers American consumers is the feeling of being cheated:  that the corporations’ profit is more important than the quality of their product.  We are left with a feeling of being deemed unworthy of better treatment or more dignified consideration.  We should be similarly outraged when our members of Congress try to cut corners in policymaking, especially when it comes to the health care of our fellow Americans struggling in (or near) poverty.  Turning Medicaid into a block grant system is an inadequate policy product for addressing our country’s federal deficit, and would be disastrous for the health care of millions of children, seniors, and the disabled.  Pink slime is intolerable, whether it is in our children’s school cafeterias, our grocery stores, or in the halls of Congress.