Republican Proposal Will Harm Disabled Children

Among the first initiatives of the newly elected Republican Congress and President Trump is to convert Medicaid and SSI to ‘block grants”. This may sound harmless enough, but it is not. These proposals will slash the minimal benefits provided to disabled children in low income families, and if this becomes law these children will be left at risk for their very lives. 

Medicaid is a jointly funded, Federal-State health insurance program for low-income children, the aged, blind, and/or disabled. Medicaid is an “open ended” program that provides minimum benefits, where for example if more people become eligible the state will receive more money. Supplemental Security Income (SSI) is a type of Social Security benefit administered by federal government that helps children with serious disabilities.

The Republican plan is to replace current Medicaid and SSI benefits with a fixed (and reduced) amount of federal money in the form of so called “block grants”. This proposal will directly affect the daily lives of the most severely disabled children in the lowest income families by reducing services and assistance. The politicians will debate:  how much less money will each state receive;  how allotments will be adjusted – for population changes, for increases in medical prices, for inflation, for new drugs and treatments; and whether the federal government will require states to cover certain populations and services; and so on. But this debate will entirely miss the point. 

These program cuts are targeted at the lowest income families, and the sickest among us. Our elected officials must discuss the facts of life and death–which is that poor families with disabled children cannot survive without these minimum benefit programs being kept in place. To qualify for SSI, recipients must meet strict medical criteria and have very low income and assets. The average SSI benefit for a disabled child is only $650 per month. According to the Center on Budget and Policy Priorities, without SSI benefits most SSI families with a disabled child would be below the poverty level; and that SSI particularly reduces “deep poverty”- defined as income below 50% of the poverty line.  These proposed changes can lead to children being at risk to not receive medically necessary care and treatment.

1. States Will Lose Billions in Federal Funding.  Block grants are designed to save federal dollars, by giving states less federal funding then they receive under current programs. Over time states would lose billions of dollars in federal funding, forcing them to spend more state money, slash program benefits, and/or make eligibility stricter. Further, block grants will decrease in value over time leaving states with less federal dollars to spend on those families who need the most help.

2. States Will be Forced to Limit Benefits. The federal government reimburses the states for most of these program costs (currently it funds SSI benefits directly) using uniform national standards. If block grants replace the current programs, states will necessarily be required to limit benefits for needy families to make ends meet. States will be forced to establish more stringent eligibility requirements; establish waiting lists or cap enrollment; limit lifesaving benefits; or create administrative barriers to coverage, which currently are not allowed, like unaffordable Medicaid premiums, or work requirements for even the sickest recipients. In short, block grants will require States to become as stingy as possible to stretch block grants further.

3. States Can Divert Block Grant Money to Plug State Budget Gaps. Block grants allow state legislatures to direct block grant funds to be used to plug holes in the state budget or fund pet projects, even if they are related only in a limited way to the needs of the families they are supposed to serve. For example, consider what Michigan did with federal money intended to provide assistance to low income families, which resulted in scholarship money being paid to higher-income family. Michigan used federal funds from a separate program called the Temporary Assistance for Needy Families (TANF) program, which is a state-administered federal program that was supposed to provide poor families with financial assistance, such as childcare assistance, job preparation, and work assistance. Block grants will allow states to divert funds from the families with the most urgent needs.  See Marketplace.org, Your State on Welfare, (June 2016), available here.

4. Block Grants Fail to Adequately Provide for an economic “Crisis”.  With block grants, states do not get needed additional federal funding if demand rises during an economic crisis. Families who face job loss or other financial emergencies are not guaranteed access to block grant benefits during the time that they are trying to get back on their feet. Although some Federal proposals would allow block grants to increase if unemployment rates rise, experts say that these proposals do not include workable formulas that are certain to help families in need. See, e.g., Robert Greenstein, Ctr. On Budget and Policy Priorities, Commentary: Ryan “Opportunity Grant” Proposal Would Likely Increase Poverty and Shrink Resources for Poverty Programs Over Time (July 2014), available here.

And now the call to action.   This is a Republican plan, and it is predicted the votes to enact this plan will be strictly along party lines.  Accordingly, Republican votes will be needed to stop “block grants”.   If you wish to oppose this plan, write to your local Republican elected officials and tell them that you oppose “block grant” funding to provide benefits to the low income, disabled children on Medicaid.