Speculation continues to circulate around whether Obamacare will be repealed, replaced, or amended. Less well known but also important are the possible changes coming to state Medicaid programs with a new administration.

President Donald Trump, in his campaign speeches, endorsed block grants to states. Block grants provide a set amount of funding while the current model of determining federal funds to states is more open-ended and flexible. A second proposal, called “per capita caps,” would limit federal spending on each Medicaid enrollee. House Speaker Paul Ryan proposes that states could choose between the block grant or per capita cap model. Also up for grabs is the Medicaid expansion program, which has enabled about 11 million people to access coverage.

Another option being discussed is requiring Medicaid beneficiaries to pay a small amount each month for their coverage, which would be put into a health savings account. Vice President Mike Pence, along with the new administrator for the Centers for Medicare and Medicaid Services, Seema Verma, developed a similar program in Indiana.

States would get control

Democrats warn that limiting federal funds could result in harmful cuts if states are unable to make up the difference, limiting access to care. Republicans say these new models would limit federal funds but allow states to innovate as they see fit, including making more expeditious changes to their programs without going through the current waiver approval process.

Even if no legislation is passed, the Trump administration could reshape Medicaid through the current state waiver process. State waivers previously proposed to require copays and premiums, which were rejected under the Obama administration, may get approved in the new Trump administration under Ms. Verma’s leadership.

“…you have to deal with Medicaid.”

As more models are being proposed, it is becoming clear that Medicaid will be part of the discussion and decisions. As Rep. Brett Guthrie, the leader of the House Energy & Commerce Medicaid Task Force, said, “In the end, if you’re going to replace Obamacare, you have to deal with Medicaid.” State Medicaid directors don’t want to be left out and have called upon the Trump administration and congressional leaders to be part of the process.


  1. Pradhan R. House ready for Medicaid overhaul – Senate, maybe not yet. Politico Pro Health Care, December 15, 2016. https://www.politicopro.com/health-care/story/2016/12/house-ready-for-medicaid-overhaul-senate-maybe-not-yet-139931
  2. Stein M. State Medicaid chiefs to Trump: Work with states on any reforms. Inside Health Policy, December 19, 2016.
  3. Sullivan P. GOP zeroes in on changes to Medicaid. The Hill, December 29, 2016. http://thehill.com/policy/healthcare/312051-gop-zeroes-in-on-changes-to-medicaid