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Maintaining Access to Care among Medicaid Recipients under State Block Grants

Policy Date: 1/1/1996
Policy Number: 9602

The American Public Health Association,
Affirming its long-standing support of the Medicaid program at a time when it faces an uncertain future in the face of initiatives to cut federal expenditures and downsize the role of federal government in domestic programs; and
Noting that Medicaid is the nation's major public financing program for providing health and long-term care coverage to millions of low-income people-more than 1 in 10 Americans in 1994;1 and
Further recognizing that the Medicaid population in the United States consists of three distinct populations, namely: the elderly, people with disabilities, and lower income mothers and children; and
Noting that these populations are increasing and concerned that proposed Congressional reforms would reduce federal Medicaid contributions to states and replace entitlements for individuals with block grants to states during a period of rising uninsurance and medical indigency among young families with children; and
Cognizant of the fact that the elderly and disabled groups account for 11% and 16%, respectively, of recipients but 27% and 32%, respectively, of total expenditures1 because of their chronic conditions and greater use of acute and long term care; and
Further recognizing that proposed "restructuring" of Medicaid2 and proposed reductions in projected Medicaid expenditures2 could eliminate access to care for potentially hundreds of thousands of seniors and disabled people;3 and
Mindful that 1.7 million people could be denied needed long-term care coverage by the year 2000;4 and
Recognizing that proposed Congressional reforms eliminate or retain only a few national criteria for eligibility to receive benefits; and
Recognizing that proposed Congressional reforms would not assure a standard minimum set of covered services; and
Concerned that releasing states from reasonable minimum standards regarding eligibility for enrollment and covered services will most likely lead to a reduction in access and a decline in quality of care and that budget cuts will pit vulnerable populations against one another; and
Concerned that institutions that have traditionally provided the largest share of services to both uninsured and Medicaid-enrolled populations, public hospitals, community and migrant health centers, rural health centers, children's hospitals, and local public health departments (the so-called "safety-net" organizations), are likely to be particularly vulnerable in the rapidly growing transition to managed care of Medicaid enrollees, threatening access to care for both uninsured and Medicaid populations; and
Believing that managed care may have the potential to improve access to care and continuity of care, but aware that there has been little managed care experience in serving disabled adults or children with special care needs and concerned that incentives to control costs could predispose managed care providers to underserve with consequent risk of poor outcomes for these vulnerable groups; and
Mindful that weak incentives exist for alternative methods for financing long-term care; therefore
1. Urges that the President veto any legislation that mandates Medicaid block grants that eliminate individual entitlement to Medicaid;
2. Urges that any future proposed block grant legislation specify methods that will be used to assure states' maintenance of effort to finance care in an equitable way;
3. Urges that fee-for-service and managed care outcome studies be mandated as part of any compromise Medicaid block grant legislation;
4. Urges that, in the context of managed care financed in any part with federal funds, individual health care consumer protections be required, including basic coverage benefits package, choice of primary and specialist physician, access to preventive services, due process rights to appeal denials of coverage, and quality oversight;
5. Urges that any retrenchment in public funding for long-term care be accompanied by policies that encourage individuals to provide for their care needs to the extent possible, such as tax incentives and federal and state standards for long-term care insurance;
6. Urges that any Medicaid legislation include measures that retain current protection of community-dwelling spouses of institutionalized individuals, allowing them to keep enough assets and personal income to avoid impoverishment and economic dependency;
7. Calls on Congress, in the context of any block grant proposal, to establish reasonable standards for states regarding enrollment eligibility and the scope of covered services to provide a national "floor" of assured access to care and access to preventive services;
8. Calls on Congress to establish a formula for federal funding that could respond to the needs of states experiencing rapid growth in the uninsured among populations targeted for Medicaid eligibility;
9. Urges a federal definition of an "essential-community provider" to identify important safety-net providers in each state, and inclusion of reasonable cost-based reimbursement to these providers in health plans receiving federal funds for the provision of Medicaid services, for a 5-year transition period; and
10. Urges Congress to require joint implementation planning including state and local involvement.


  1. Kaiser Commission on the Future of Medicaid. Medicaid Facts. Washington, DC: Kaiser Family Foundation; December 1995.

  2. US Senate Committee on Finance, US House of Representatives Commerce Committee, Medicaid Restructuring Act of 1996.

  3. Holahan J, Liska D. Impact of House and Senate Budget Committees Proposals on Medicaid Expenditures. Urban Institute Report for Kaiser Commission on the Future of Medicaid. Washington, DC: Urban Institute, May 1995.

  4. Kasner E. Long-Term Care: Measuring the Impact of a Medicaid Cap. Lewin-VHI; April 1995.