ZIKA, Medicaid and Risk Adjustment under block grants

And now for something really depressing:

The toll that Zika virus takes on pregnancies appears to be even higher than was previously estimated, with a newly updated study from Brazil suggesting that 42 percent of infants infected in the womb may have significant birth defects.

When the authors factored in stillbirths and miscarriages suffered by women who had been infected with Zika, 46 percent of pregnancies were affected. Microcephaly — a condition in which babies are born with smaller than normal heads — was seen in only about 3 percent of babies in the study.

“Microcephaly is just the tip of the iceberg. It’s definitely not where the focus should be,” said Dr. Karin Nielsen-Saines, the paper’s senior author. “For every case of microcephaly you’re probably going to have 10 cases of other problems that haven’t been recognized.”

In the United States, roughly half of all births are covered by Medicaid. Medicaid and CHIP cover a good number of kids and these two programs cover a disproportionate number of children with significant, expensive life long conditions. We also know that locally transmitted Zika infections will not be uniformly distributed. Alaska will have far fewer proportional Zika infections than Florida. We also know that one of the major policy planks of the Republican trifecta will be to block grant Medicaid on a per capita basis.

We know that treating and caring for an individual with microcephaly will have a lifetime cost of $10 million dollars. Other neurological and cognitive conditions will have lower lifetime incremental costs but these individuals will cost more than their non-Zika effected peers. We know that state Medicaid budgets will cover a high proportion of these individuals. If Zika is not quickly isolated and reduced to a random outbreak here and there and instead is endemic, we have a serious Medicaid financing crisis at hand if the federal funding is transformed into a block grant.

The Medicaid block grant procedures would give states a fixed head payment for each enrollee. It could vary by category of assistance and a few other criteria but the fee would be flat within subgroups by the number of enrollees. From here, the states could have the choice to top-up the Federal match or spend state supplied money in other manners. This is different from the current system where the Feds give the states an open ended funding stream that is a state specific multiple of the state contribution. The block grant removes the variability of the federal spending commitment. In the Ryan plans, it also shrinks in terms of real purchasing power over time so states either spend more money to maintain current level of enrollment and services or cuts to enrollment and services have to occur.

And here is where there is a problem. The capitated payments would be based on average expected costs in year 1 and then get weaker. States with disproportionate clustering of high cost conditions will be significantly worse off. Long run Zika neurological impairments will hit warmer states’ Medicaid budgets much harder and more disproportionally than Zika will hit cold weather states’ Medicaid budgets. This could be adjusted for by having a Zika bump in the block grant calculation much like there could be a diabetes bump or a maternity bump or any other number of risk adjusted bumps to capitation payments. But what happens when there is a new high cost and very concentrated disease that will have major impact on a few states’ Medicaid budgets? The block grant system fails unless there is a side payment of new federal funds. And given the political fights over natural disaster relief bills and the Zika bill, I have a hard time seeing Congress routinely providing multi-billion dollar cash infusions to a few states for new diseases or threatening epidemics.

16 replies
  1. 1
    Thoroughly Pizzled says:

    Today is the fourth anniversary of Sandy Hook. We have done NOTHING since then that could have saved those children.

  2. 2
    patrick II says:

    I share your concerns about the feasibility of medicaid block grants. However, after watching the republican governors of 19 states turn down free medicaid for their citizens and as a result allowing over 5,000 of their citizen’s deaths, I don’t think the people now in charge really give a damn. Public policy is not their thing, nor the thing of our new Randian overlords. Instead they will be asking — where is the profit making opportunities in the spread of the Zika virus? and how can we get our cut?

  3. 3
    gratuitous says:

    Considering the power that Congress had this past year to enact legislation to get out front of this public health emergency (crisis?), and their complete failure to do anything, such that the natural and foreseeable consequences that will be visited on the American people in 2017 will be made even worse, this would seem to be the sort of thing that could be used as a political issue. But since both sides can’t be held accountable, I suppose it would be oh-so-wrong to make the coming avoidable deaths and disabilities of newborns a political football. As bad as it would be to have a disabled child, placing blame on the Republicans for it would make the baby Jesus cry.

  4. 4
    rikyrah says:

    The toll that Zika virus takes on pregnancies appears to be even higher than was previously estimated, with a newly updated study from Brazil suggesting that 42 percent of infants infected in the womb may have significant birth defects.

    And the hits just keep coming :(

  5. 5
    Yarrow says:

    It’s going to take a lot of white babies with problems from Zika before anything happens. And even then it’s going to along the lines of spraying poison from the sky and killing bees, like happens in one of the Carolinas this year.

  6. 6
    ArchTeryx says:

    If only viruses checked your party registration before infecting you. Sadly, they aren’t smart enough to do that. They don’t care if you’re Democrat or Republican, liberal or reactionary, northern or southern. We’re all just cell cultures to viruses.

    Cancer doesn’t check your party registration before going rogue, either. Funny, that.

    Up until recently, medical research was one of the few areas of science that remained above the political fray – Newt Gingrich was a champion of increased NIH funding (!!!) because even scum like him recognized that diseases don’t give a shit whether you’re one of the ‘right’ people or not. Cancer, Ebola, Zika, and other deadly pathogens devour the rich and the poor alike, and sometimes, no amount of money or power will stave off the Grim Reaper that always follows in their wake.

    Our modern Republicans? Not so much. They’re where Stalin was after WWII: Trying to bend the natural world to fit the Party’s ideology. Won’t work. Didn’t work for Lysenko, and won’t work for any of Trump’s apparatchiks, either. Mother Nature doesn’t give two shits about your politics, and she can be a cast-iron bitch to those who ignore her warnings.

    (And this isn’t even getting into the utter idiocy of leaving large populations of uninsured people as absolutely ideal disease vectors to the rest of the population. These people work in your grocery stores, your restaurants, your auto repair shops, your department stores. And they have to work sick. Coming soon to a service outlet near you!)

  7. 7
    Starfish says:

    @Thoroughly Pizzled: What do you think we could have done to save the children in the case of Lanza?

  8. 8
    Ohio Mom says:

    @Yarrow: There are currently plenty of white children with the whole range of disabilities currently on Medicaid or waiting to get on Medicaid (my kid is one). It doesn’t matter what color you are, it’s always been an uphill battle to get funding and recognition for people with disabilities. More white babies with developmental disabilities caused by Zika won’t change this.

    I am also sorry to report that there are a good number of people in the disability community who are Republicans. At least some of that is because there are a lot of anti-choicers who interpret choice as, “I would have been aborted!” I won’t even start unpacking that.

  9. 9
    raven says:

    @Ohio Mom: Yep, I know a total fucking wingnut with a severely disabled son. He is very vocal about the Trump mocking the disabled reporter was “fake news”.

  10. 10
    gene108 says:


    Republicans had offered up Zika funding bills. Democrats just could not go along with them. So what if the Republican bills had crazy, non-Zika related amendments on them. Democrats are ultimately at fault for not agreeing to pass them. They obstructed the funding bills.

    /MSM reporting

  11. 11
    ArchTeryx says:

    @Ohio Mom: That’s because there’s no easy way to unpack a counterfactual, other then to remind them of reality: They’re obviously here and not aborted, and nobody is going to go back in time to change that.

    Beyond that you’re getting into the period of development that a clump of cells gains a soul, and you may as well argue about how many angels can dance on the head of a pin(head) for all the good it will do.

  12. 12
    Ohio Mom says:

    @ArchTeryx: Yes, and had any of them in fact been aborted or miscarried, they wouldn’t be here today to fret about. (For some reason I am reminded of the joke about the two men from Chelm (a mythical Yiddish village populated completely by fools). “Ach, life is so hard, I sometimes think it would have been better not to have ever been born,” says the first fellow. His friend replies, “But how many people are that lucky?”)

    It is particularly frustrating to me as a disability mom to have to face that many of the people I should have so much in common with are actively working to make my kid’s life worse. Like Raven, I know wing nuts with disabled family members.

  13. 13
    artem1s says:

    the abortion fight is about to get very, very interesting.

  14. 14
    Thoroughly Pizzled says:

    @Starfish: Repealed the 2nd amendment. Feasible solution, I’m not exactly sure. But we haven’t even tried anything.

  15. 15
    Ohio Mom says:

    Just yesterday, a family friend asked me if my kid could eventually move into the Jewish group home on our neighborhood. The answer is No, because you need a good sized Medicaid Waiver to pay for the group home (or come up with upwards of $30,000-40,000 a year to self-pay). People seem to think services for the disabled grow on those proverbial trees.

    Not trying to discount the point of Richard’s post, just wanting to add that Medicaid is already not meeting the needs it was designed for. And then there are all the elderly who depend on it, which admittedly I don’t know much about, detail-wise.

    Going to a block-grant system instead of the one we have now, where the Feds match each state’s contribution, is going to cause a tidal wave of hurt.

  16. 16
    Mnemosyne says:

    @Ohio Mom:

    Frankly, it usually traces back to them having had a really terrible relationship with their parents, who resented having had them in the first place. My high school boyfriend’s mother actually told him she wished she’d had an abortion instead of marrying his father. I know this because she said it in front of me.

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