Obamacare Repeal: What May Replace It
Medicaid Block Grants continued...
In exchange for less federal money, states face fewer restrictions about how they operate their Medicaid programs.
That allows states greater flexibility to design their Medicaid programs in ways that best meet the needs of their residents.
Cons: “It will squeeze the amount of money the states will receive for the program, and it doesn’t adjust with what’s going on in the economy,” Blumberg says.
Today, if the economy goes south and more people sink into poverty, more people then become eligible to get insurance coverage under Medicaid. Under block grants, it’s unlikely that state Medicaid programs could accommodate an expansion.
“Block grants won’t adjust for the fact that more poor people need insurance,” Blumberg says. They also don’t keep up with the rising cost of medical care.
Blumberg says that while states will have more flexibility, block grants will provide fewer protections for people with low incomes and no protection at all for people who suffer economically when the economy declines. The same CBO analysis said the lower expenses would stem from denying roughly 14 million people access to Medicaid.
Health Savings Accounts
Trump has proposed expanding the use of health savings accounts, or HSAs, as an alternative to Obamacare.
HSAs are investment accounts -- like a 401(k) retirement or a 529 college savings plan -- that can be opened by anyone enrolled in a qualified health insurance plan.
These accounts have been around since 2004. Today, nearly 1 in 5 people with work-based health insurance are enrolled in an HSA.
A number of Republican plans would nearly double the maximum yearly amount of income you would be allowed to place in an HSA, which is currently $3,400 for individuals and $6,750 for families.
In addition, Trump has said he intends to allow HSA funds to be used by any member of a family without penalty. They would also become part of a person’s estate and could be passed on to heirs without having to pay a death penalty.