By: MA
In Street-Level Bureaucrats, Michael Lipsky argues that government workers who interact directly with citizens have considerable influence on public policy.[i] This essay will argue that president-elect Trump’s Medicaid block grant proposal can be explained as an effort to rein in street-level bureaucrats’ “bottom-up” influence on the scope of a federal program.[ii]
Lipsky argues that street-level bureaucrats play a critical role in public policy because their individual actions add up to agency policy. The nature of their work requires a high level of autonomy and discretion, which gives them wide latitude over public program implementation and administration. For example, street-level bureaucrats make eligibility determinations affecting dispersal of benefits and services, they establish standard processes through which clients interact with public systems and they socialize clients about expectations around government services. Cumulatively, these actions impact the quantity and quality of services delivered and the extent to which public programs meet stated policy goals.
State Medicaid administration offers examples of street-level bureaucrats’ potential to affect the scope of a program. Medicaid was designed to provide health insurance for low-income children and their caretakers, low-income seniors, blind people and individuals with disabilities.[iii] In order to target Medicaid services to low-income people, eligibility is determined by federal income and asset thresholds. But street-level bureaucrats can influence who actually receives Medicaid coverage. Lipsky argues that street-level bureaucrats often teach clients to expect little or no public support. The message can be communicated directly, or conveyed implicitly through barriers to services. For example, complex enrollment procedures have been shown to decrease participation in Medicaid, effectively excluding people who meet the eligibility standards.[iv] In other cases, sympathetic bureaucrats may advise clients on how to exploit loopholes to receive maximum benefits, extending eligibility beyond original intent.
An example of the latter is the practice of “spousal refusal,” which allows some higher-income (or those with assets) to receive long-term care covered by Medicaid.[v] Spousal refusal allows a spouse (or parents of a child) requiring long-term care to refuse to pay for the service, requiring Medicaid to cover it. This provision is based on the idea that it would be cruel to force a family to exhaust their savings to pay for a family member’s care, greatly reducing quality of life for the rest of the family. Spousal refusal effectively extends Medicaid coverage for long-term care to higher income families. It is most often used by individuals who have access to financial planning services. Recognizing that some families have used this loophole to protect their assets, the practice has been eliminated in most states with the exception of New York, Florida and Connecticut. Further, some jurisdictions in New York have taken steps to make spousal refusal easier by attaching spousal refusal paperwork to Medicaid nursing home applications.
Trump’s broad policy plan includes a proposal to “permit states to manage Medicaid funds.” In the absence of specific details, this essay assumes that Trump’s plan is similar to proposals put forward by house speaker Paul Ryan and by former presidential candidate Mitt Romney to transform Medicaid from an entitlement program into a block grant. Under current law, Medicaid is an entitlement program; everyone who meets the eligibility criteria can enroll and receive services. The federal government defines specific services that must be provided, and the program is financed through a combination of state and federal funds. Under the current system, Medicaid spending is a function of the number of enrollees.
The block grant proposal can be explained as a solution the principal-agent problem that exists between the federal and state governments in financing Medicaid. Principal-agent problems arise when an “agent” makes decisions on behalf of the “principal,” and the principal bears the cost. A block grant would limit the influence of street-level bureaucrats on federal Medicaid spending. Under this scenario, federal policymakers would cap federal spending on Medicaid, exerting greater control over spending than under the entitlement system. States would likely receive less federal support, but would gain the ability to determine which services are covered by Medicaid. For example, New York could choose to continue the spousal refusal policy, but could not receive funding beyond the federal cap to cover long-term care. Advocates who support a block grant argue that it would reduce spending by encouraging states to end wasteful spending and abuse within the Medicaid program.[vi]
This week's lead precis asks what recourse street-level bureaucrats may have to push back against Trump’s policy proposals. Bureaucrats alone may not be able to stop a Medicaid block grant from being enacted, but states have some incentive to push back on behalf of constituents. Lipsky argues that rationing public resources can be difficult. Once a track record of service is established, it serves as a baseline for citizens’ expectations. Rolling back a benefit that enjoys popular support can be politically difficult.
Returning to the example of spousal refusal, each of Governor Cuomo’s six executive budgets has proposed eliminating this practice due to the cost, and each time it has been defeated by the state legislature. If the federal government was to enact a Medicaid block grant and cap federal funding, the state would have to make hard choices about spousal refusal for long-term care services. Therefore resistance would more likely come from state governments that fear political consequences resulting from rationing benefits, than from street-level bureaucrats.
[i] Lipsky, 1980.
[ii] Howlett, Ramesh and Perl, 2009.
[iii] Kaiser Family Foundation, “Medicaid Implementation Timeline” (March 24, 2015)
[iv] Phil Galewitz, “States Ease Barriers to Medicaid, CHIP Enrollment, Survey Says,” Kaiser Health News (January 18, 2012)
[v] Ann Margaret Carrozza, “Why We Need Spousal Refusal” Huffington Post Blog (April 11, 2015)
[vi] Addy Baird, “Trump’s Medicaid Proposal Could Leave Many Uninsured,” Politico New York (November 10, 2016)
In Street-Level Bureaucrats, Michael Lipsky argues that government workers who interact directly with citizens have considerable influence on public policy.[i] This essay will argue that president-elect Trump’s Medicaid block grant proposal can be explained as an effort to rein in street-level bureaucrats’ “bottom-up” influence on the scope of a federal program.[ii]
Lipsky argues that street-level bureaucrats play a critical role in public policy because their individual actions add up to agency policy. The nature of their work requires a high level of autonomy and discretion, which gives them wide latitude over public program implementation and administration. For example, street-level bureaucrats make eligibility determinations affecting dispersal of benefits and services, they establish standard processes through which clients interact with public systems and they socialize clients about expectations around government services. Cumulatively, these actions impact the quantity and quality of services delivered and the extent to which public programs meet stated policy goals.
State Medicaid administration offers examples of street-level bureaucrats’ potential to affect the scope of a program. Medicaid was designed to provide health insurance for low-income children and their caretakers, low-income seniors, blind people and individuals with disabilities.[iii] In order to target Medicaid services to low-income people, eligibility is determined by federal income and asset thresholds. But street-level bureaucrats can influence who actually receives Medicaid coverage. Lipsky argues that street-level bureaucrats often teach clients to expect little or no public support. The message can be communicated directly, or conveyed implicitly through barriers to services. For example, complex enrollment procedures have been shown to decrease participation in Medicaid, effectively excluding people who meet the eligibility standards.[iv] In other cases, sympathetic bureaucrats may advise clients on how to exploit loopholes to receive maximum benefits, extending eligibility beyond original intent.
An example of the latter is the practice of “spousal refusal,” which allows some higher-income (or those with assets) to receive long-term care covered by Medicaid.[v] Spousal refusal allows a spouse (or parents of a child) requiring long-term care to refuse to pay for the service, requiring Medicaid to cover it. This provision is based on the idea that it would be cruel to force a family to exhaust their savings to pay for a family member’s care, greatly reducing quality of life for the rest of the family. Spousal refusal effectively extends Medicaid coverage for long-term care to higher income families. It is most often used by individuals who have access to financial planning services. Recognizing that some families have used this loophole to protect their assets, the practice has been eliminated in most states with the exception of New York, Florida and Connecticut. Further, some jurisdictions in New York have taken steps to make spousal refusal easier by attaching spousal refusal paperwork to Medicaid nursing home applications.
Trump’s broad policy plan includes a proposal to “permit states to manage Medicaid funds.” In the absence of specific details, this essay assumes that Trump’s plan is similar to proposals put forward by house speaker Paul Ryan and by former presidential candidate Mitt Romney to transform Medicaid from an entitlement program into a block grant. Under current law, Medicaid is an entitlement program; everyone who meets the eligibility criteria can enroll and receive services. The federal government defines specific services that must be provided, and the program is financed through a combination of state and federal funds. Under the current system, Medicaid spending is a function of the number of enrollees.
The block grant proposal can be explained as a solution the principal-agent problem that exists between the federal and state governments in financing Medicaid. Principal-agent problems arise when an “agent” makes decisions on behalf of the “principal,” and the principal bears the cost. A block grant would limit the influence of street-level bureaucrats on federal Medicaid spending. Under this scenario, federal policymakers would cap federal spending on Medicaid, exerting greater control over spending than under the entitlement system. States would likely receive less federal support, but would gain the ability to determine which services are covered by Medicaid. For example, New York could choose to continue the spousal refusal policy, but could not receive funding beyond the federal cap to cover long-term care. Advocates who support a block grant argue that it would reduce spending by encouraging states to end wasteful spending and abuse within the Medicaid program.[vi]
This week's lead precis asks what recourse street-level bureaucrats may have to push back against Trump’s policy proposals. Bureaucrats alone may not be able to stop a Medicaid block grant from being enacted, but states have some incentive to push back on behalf of constituents. Lipsky argues that rationing public resources can be difficult. Once a track record of service is established, it serves as a baseline for citizens’ expectations. Rolling back a benefit that enjoys popular support can be politically difficult.
Returning to the example of spousal refusal, each of Governor Cuomo’s six executive budgets has proposed eliminating this practice due to the cost, and each time it has been defeated by the state legislature. If the federal government was to enact a Medicaid block grant and cap federal funding, the state would have to make hard choices about spousal refusal for long-term care services. Therefore resistance would more likely come from state governments that fear political consequences resulting from rationing benefits, than from street-level bureaucrats.
[i] Lipsky, 1980.
[ii] Howlett, Ramesh and Perl, 2009.
[iii] Kaiser Family Foundation, “Medicaid Implementation Timeline” (March 24, 2015)
[iv] Phil Galewitz, “States Ease Barriers to Medicaid, CHIP Enrollment, Survey Says,” Kaiser Health News (January 18, 2012)
[v] Ann Margaret Carrozza, “Why We Need Spousal Refusal” Huffington Post Blog (April 11, 2015)
[vi] Addy Baird, “Trump’s Medicaid Proposal Could Leave Many Uninsured,” Politico New York (November 10, 2016)