Medicaid Waivers



On May 2, the Tennessee state legislature approved legislation supported by Governor Bill Lee requiring Tennessee to submit a Medicaid block grant plan to the federal government using the 1115 waiver program within six months. Such a plan would request the federal portion of the funding for the state’s Medicaid program (currently about two-thirds of the total cost) in a lump sum in exchange for “greater flexibility” in administering the program’s healthcare coverage for children, pregnant women, seniors in nursing homes and people with disabilities. This lump sum would not increase if program enrollment increases, and would make Tennessee the first state to ask the Trump Administration for lump sum Medicaid funding. 

Lutheran Services in America is deeply concerned that such a move could mean eventual slashed eligibility or services for many in the state. This is critically important given that six in 10 seniors in nursing homes rely on Medicaid, nearly 40% of children receive health coverage through this vital program, and over 10 million people with disabilities rely on Medicaid for care. While we agree that, as with any health system, Medicaid is not perfect and can be improved, changing the fundamental payment structure and access to this vital program is not in the best interests of those we serve in the Lutheran Services in America network.

The legislation was developed following ongoing indications from Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma that she wants to approve waiver applications from states seeking block grant funding for their Medicaid programs. However, CMS legal staff have not yet determined a way for the agency to legally approve such waivers under the parameters of existing Medicaid law. Therefore, much like with Medicaid work requirements, block grant waiver approval is likely to face lengthy legal opposition before it could become legally binding. Nevertheless, given that Tennessee’s actions could become a “test case” for other states that have indicated they’re considering requesting similar block grant waivers, we wanted to provide you with this update now so you are aware of this effort to block grant Medicaid.


While timing on this issue is still early, you may wish to gauge whether similar actions could potentially occur in your state by contacting your state legislature, your state’s agency that administers Medicaid, or any non-governmental state-wide organization for Medicaid stakeholders in your area. In addition, we have provided suggested talking points below, should you be asked by contacts or reporters in your state about this issue.

From a federal perspective, Lutheran Services in America will continue to meet with our Capitol Hill and federal agency contacts on this issue, to be part of ongoing conversations and help shape this issue’s direction moving forward. We will be voicing our strong opposition to changing the basic structure of traditional Medicaid or weakening this vital program’s support of America’s most vulnerable people. Additionally, we will closely monitor this issue and keep you informed as related actions occur. Please feel free to contact Sarah Dobson or Dania Douglas with any related questions.



  • “Given our commitment to working with our state’s most vulnerable people, we are closely monitoring this Medicaid news from Tennessee. We have serious concerns that should the Medicaid block grant move forward in Tennessee, other states may follow suit.”
  • “We are gravely concerned that changing Medicaid’s payment structure would harm the six in 10 seniors in nursing homes who rely on Medicaid, the nearly 40% of children receiving health coverage through this vital program, and the over 10 million people with disabilities relying on Medicaid for care.”
  • “While it is unclear whether the Administration can legally restructure how the Medicaid program is financed, the potential of Tennessee’s Medicaid block grant request being approved sets a precedent to further reduce the Medicaid program.”
  • “In the United States, Medicaid is the only real coverage available for seniors in nursing homes and people with disabilities. A major concern about Tennessee’s block grant request is that the state would receive considerably fewer federal dollars to care for its most vulnerable populations. This could force the state to dramatically cut the number of people receiving services through Medicaid, while also severely curtailing many of the types of services it provides to seniors, children, youth and families, and people with disabilities.”