The Trump administration is expected to announce this morning a major change to the Medicaid program that would allow states to convert part of their federal funding into a block grant with a fixed cap.

The new program, which according to Politico will be called “Health Adult Opportunity,” is expected to focus on “able-bodied” adults who gained coverage under Affordable Care Act-related Medicaid expansion in some states, but senior living industry representatives told McKnight’s Senior Living that older adults still could be affected.

“We do not support block grants at the federal level because their purpose is to reduce federal Medicaid spending. Sooner or later, block grants, combined with state balanced budget requirements and other state regulatory responsibilities, will force states to take steps to pare back their Medicaid spending by either kicking people out of the program, cutting back on covered services, cutting payments to healthcare providers — or some combination of those strategies,” LeadingAge President and CEO Katie Smith Sloan said. “Because so much of Medicaid goes to long-term services and supports, LeadingAge is concerned about the very real possibility of cutbacks in our sector. States just would not be able to save enough money to meet the limits of a block grant by reducing spending on other aspects of their Medicaid programs, including the expansion population.”

Residents of affordable senior housing communities also could be negatively affected, Sloan said.

“[W]hile the guidance focuses on the expansion population, largely comprised of working-age adults, it can have significant effects on health insurance coverage of older residents in affordable housing,” she said. “This can cause significant downstream impacts, including worse health outcomes for older adults as well as cost increases to Medicaid and Medicare programs as people age into Medicare eligibility without prior health insurance coverage.”

LeadingAge is one of the organizations that has opposed using block grants and per capita caps for Medicaid financing in the past, including when the approach was proposed in 2017 as part of efforts to repeal and replace the ACA.

“Our sentiment from 2017 still holds true: Medicaid, while a crucial lifeline for poor people, is a consequential resource for others, including middle-class families as well,” Sloan said. “It is how they pay for long-term services and supports.”

The American Health Care Association / National Center for Assisted Living also opposed 2017 block grant efforts and will be reviewing the new plan once it is released, Mike Cheek, the organization’s senior vice president of reimbursement policy, told McKnight’s Senior Living.

“[M]ost people who reside in nursing centers rely on Medicaid, as well as tens of thousands of seniors in America’s assisted living communities,” he said. “Any reduction in already limited Medicaid resources will be detrimental to providing the quality care on which our nation’s most vulnerable residents rely.”

Approximately 16.5% of assisted living residents rely on Medicaid to pay for their daily services, according to NCAL.

Challenges expected

The block grant effort is expected to face numerous legal and political challenges.

Wednesday, 35 House Democrats sent a letter to Department of Health and Human Services Sec. Alex Azar and Centers for Medicare & Medicaid Services Administrator Seema Verma outlining their “strong concerns” and asking them to abandon the plan.

“Guidance providing states a roadmap to obtain Medicaid block grant waivers not only defies Congress and the federal Medicaid statute but if implemented, will threaten health care for millions of individuals, hurting them when they are the most vulnerable,” they wrote. “The Administration should not issue any guidance encouraging block grant waivers, should reject these waivers and the concept of block grants, and urge any state that is considering this misguided policy to commit its energy to implementing the Medicaid Act as Congress intends.”