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Testimony on Medicaid Program Reform by The Honorable Donna E. Shalala
U.S. Department of Health and Human Services

Before the House Commerce Committee
June 11, 1996

Mr. Chairman, Congressman Dingell and members of the Committee: thank you for inviting me to testify today about the most recent Medicaid proposal introduced by Representatives Bliley, Bilirakis,Archer, and others on May 22.

As this Committee and the Congress continue to consider options to reform the Medicaid program and pursue a balanced budget, we appreciate the opportunity to state clearly the President's vision for reform in this area.

The Clinton Administration believes that we must balance the budget by the year 2002 and give more responsibility to the states and local communities. But we must do it in a way that is consistent with the values of our nation.

As the President has said time and time again: We can balance the budget and find common ground -- without turning our backs on our values, our families, and our future.

In Medicaid, we believe we can give the states the flexibility they need, while maintaining a strong federal-state partnership built on a foundation of shared resources, accountability to the taxpayers, and national protections for the most vulnerable Americans.

That is why the President has proposed a common sense plan that balances the budget, gives unprecedented flexibility to the states, and reforms Medicaid without breaking our promises to our citizens -- from seniors living in nursing homes to families struggling to work their way out of poverty. And that is why he has refused to sign legislation which breaks these promises.

The President has also made clear that the current strategy of the majority in Congress to link welfare reform to unacceptable changes in Medicaid will leave him no choice but to veto the entire package. We call on Congressional leaders to abandon the "poison pill" strategy that is designed to provoke a veto. We strongly support the bipartisan efforts of the governors and moderate bipartisan groups in both Houses of Congress to reform welfare without gutting Medicaid.

Medicaid provides vitally important health and long-term care coverage for approximately 37 million Americans and their families: * It provides primary and preventive care for 18 million low income children; * It covers 6 million individuals with disabilities -- providing the health, rehabilitation, and long-term care services that would otherwise be unaffordable for these individuals and their families; * It covers 4 million senior citizens -- including long-term care benefits that provide financial protection for beneficiaries, spouses, and the adult children of those requiring nursing home care. * Finally, it pays the Medicare premium and cost sharing for low income seniors, thus putting the benefits of Medicare Within reach.

The Clinton Administration is dedicated to strengthening and improving Medicaid, so that it can continue to fulfill the promise of our nation to millions of children, elderly, and disabled Americans and their families. To achieve this goal, this Administration has worked vigorously in partnership with the states to test innovative new approaches to delivering and financing care for Medicaid patients. During our first 3 years in office, this Administration approved 91 major Freedom of Choice waivers and waiver renewals, which allow states to enroll beneficiaries in managed care plans. We have also approved 163 new and renewed Home and Community-Based Services waivers, which enable states to use home care as an alternative to costly nursing home care. in addition, since January 1993 we have approved 12 statewide Medicaid demonstrations, 8 of which are currently operational. This compares to a total of one such demonstration approved under all previous administrations. In addition, we are currently reviewing proposals submitted by 12 other states. Some statewide demonstrations expand access to the uninsured, others test new methods for delivering mental health services, and still others implement simplified eligibility requirements.

The flexibility provided by these waivers has allowed states to improve the efficiency with which they provide care. Some states have used the resulting savings to cover additional populations with unmet health care needs. When all of the currently approved demonstrations are implemented, nearly 2.2 million individuals who did not receive Medicaid coverage will be eligible for services.

As part of his balanced budget plan, the President has proposed a carefully designed and balanced approach to Medicaid reform which builds on this experience. His plan preserves the essential elements of Medicaid (title XIX of the Social Security Act) while making important changes that will give states unprecedented flexibility to meet the needs of the people they serve. The President's plan: * preserves Medicaid protection for all currently eligible groups; * maintains our shared financial partnership with the states as they provide health coverage to needy individuals; * preserves the Federal guarantee of a congressionally- defined benefit package for Medicaid beneficiaries; * contributes Federal savings to the balanced budget plan through reductions in disproportionate share hospital payments and the use of a per capita cap on Federal matching that adjusts automatically to changes in state Medicaid enrollment and changes in the economy; and * provides states far greater flexibility to better manage their programs, pay providers of care, and operate managed care and other arrangements with reasonable Federal requirements to maintain programmatic and fiscal accountability (Chart A). <.ul>

I have brought a chart that details the broad new flexibility states would have under the President's proposal.

As you know, the President strongly opposed the Medicaid proposals passed by Congress last year because they failed to meet these principles. The Congress repealed the Medicaid program and replaced it with a new "Medigrant" program that did not provide meaningful Federal guarantees of eligibility or benefits. The Congress also put forward a "block-grant" funding mechanism that breached the 30 year Federal commitment with the states to Share in Changes in state Medicaid spending, and left states with the full financial responsibility for providing health care to individuals who qualify for services in the future due to unanticipated enrollment increases or economic downturns.

Last February, the National Governors' Association approved the outlines of a bipartisan Medicaid reform plan. As I testified before this Committee in March, we believed the governors' plan -- produced through a bipartisan process-- held some promise and we were hopeful that, once more details were known, there would be a real basis for Medicaid reform. The governors clearly worked very hard to move the debate forward. At the same time, however, I discussed the Administration's concerns with some key elements of the governors' plan.

Last month, the Republican majority in both Houses of Congress introduced a revised version of their Medicaid bill, which I will discuss today. This bill moves us further away from the bipartisan reform envisioned by the governors, and much closer to the Republican legislation that the President vetoed last year. Our view is shared by the Democratic governors who were instrumental in crafting the NGA agreement. In a May 29 letter to Senator Roth, four Democratic governors stated that:

"The Republicans' Medicaid proposal is far from the NGA agreement and appears to be more like the proposal vetoed by the President last year and rejected by the Governors at our winter meeting.... According to our early calculations, 96 percent of the funding under this new formula is distributed precisely in the same manner as your earlier bills proposed. You have created a block grant for this program with essentially the same language and parameters of the vetoed bill -- a block grant that denies a safety net for our most vulnerable citizens."

Let me be clear: the new Republican bill, like its predecessor, fails to meet the President's basic principles for Medicaid reform. If this bill is sent to the President, I would recommend that he veto it.

I discussed the President's basic principles for Medicaid reform when I testified before this committee last fall and this spring. AS shown on the next chart (chart B), they are: (1) the need for a real, enforceable Federal guarantee of coverage to a congressionally-defined benefit package; (2) appropriate shared Federal and state financing; and (3) quality standards, beneficiary protections, and accountability. I will now discuss why the new Republican Medicaid plan fails to meet each of these three principles.

The Federal Guarantee of Coverage and Benefits

The Federal "guarantee" of coverage and benefits is at the core of the Medicaid program. Unfortunately, the term "guarantee" has been assigned very different meanings in the context of the current Medicaid debate. When we use the term guarantee in the context of a Federal statute like Medicaid, we mean a real guarantee, composed of three interrelated components: definitions of 1) eligibility; 2) benefits, and 3) enforcement.


Let's begin with eligibility. The new Republican bill would deny millions of Americans the Federal guarantee of Medicaid eligibility that they now have under current law. The bill repeals the phase-in of the Federal guarantee of Medicaid coverage for children ages 13 to 18 in families with income below the Federal poverty level -- a bipartisan coverage expansion signed into law by President Bush.

In addition, the new Republican bill repeals the Federal standard for defining disability and replaces it with language that could mean 50 separate state definitions. This has the effect of making Medicaid coverage and benefits for those with disabilities uncertain and variable across the nation. For example, some states could use restricted definitions of disability that result in very limited coverage for those whose needs are pronounced and among the most costly. In fact, States might be forced to narrow their definitions of disability in order to cope with lower Federal funding levels. In such situations, narrow state definitions of disability could preclude individuals with HIV, certain physical disabilities, or mental illness from receiving critically needed services under Medicaid. We should not turn back the clock on those with disabilities by permitting 50 different state definitions for purposes of Medicaid coverage.

The new Republican bill also eliminates the current law requirement that Medicaid be provided for one year to persons who leave welfare in order to join the workforce. By eliminating this guarantee, the Republican proposal could discourage individuals from leaving welfare and set back our efforts to reform the welfare system.

Finally, the new Republican bill gives states the authority to impose additional eligibility limits based on age, residence, employment or immigration status, or more restrictive definitions of assets and income. This provision will enable states, if financially necessary, to restrict eligibility even among those people who supposedly are "guaranteed" coverage.


Eligibility is only one component of the guarantee. The next question is "eligibility for what?", which brings us to benefits. The new Republican bill "guarantees" some benefits for those populations who are "guaranteed" eligibility. But this guarantee is hollow. Many loopholes make it essentially meaningless.

One giant loophole in the "guarantee of benefits" relates to the adequacy of the benefits. Current Medicaid law and regulations already give states substantial flexibility in defining the amount, duration, and scope of benefits, and states have used this flexibility to tailor Medicaid packages to their unique circumstances. This latitude is tempered by a very reasonable constraint -- benefits must be "sufficient to reasonably achieve their purpose." The Republican bill removes this sensible provision, giving states complete flexibility on amount, duration, and scope. Thus, states could "guarantee" coverage for hospital and physician services, but -- if forced to do so -- could limit this coverage to unreasonably low levels such as 3 days of hospital care and one physician visit per year. This type of guarantee is meaningless for persons who truly need medical care.

Another loophole in this "guarantee" is the new elimination of current law standards of comparability and "statewideness" of services. Without these standards, some states could offer different coverage and benefit packages in different parts of the state, or to different groups based on their age or diagnosis. Eliminating requirements for comparability and statewideness leaves states free to discriminate against persons who live in certain areas, who have specific diseases (such as AIDS), or who lack political clout (such as children).

The new Republican bill also severely curtails the treatment services which must be provided under the Early and Periodic, Screening, Diagnosis, and Treatment (EPSDT) program. Under the Republican bill, Children must be screened for a range of health problems, but treatment is only required for dental, hearing, and vision problems. If a child is diagnosed with any other medical problem, they are not guaranteed treatment. Therefore, an asthmatic child would not be guaranteed coverage for treatment, such as asthma-controlling drugs or inhalers. Diagnosis without treatment is bad medical care and a wasteful use of taxpayers' dollars.


The third essential component of the Federal guarantee is enforcement. Implicit in the concept of defined populations and defined benefits is the notion of a meaningful enforcement mechanism. A Federal cause of action for beneficiaries assures that those seeking a remedy for the deprivation of medical care receive the same due process rights everywhere in the United States. The new Republican bill requires states to provide a state right of action, but eliminates the Federal right of action for individuals and providers who assert that a state is violating Federal Medicaid laws. The only access to Federal court for such claims would be if the Secretary brings the action to Federal court on behalf of the individual or if the individual petitioned the U.S. Supreme Court for review of a decision of a state's highest court. By denying beneficiaries access to the Federal courts, the Republican bill eliminates individuals' guarantee to enforceable Federal benefits. Thus, Medicaid would confer a Federal right to benefits but lack a Federal enforcement mechanism - a virtually unprecedented situation.

Provider suits against states have caused the greatest problem to the states. Under the Administration's plan, the Boren Amendment and related provider payment provisions would be repealed, thereby eliminating these causes of action by providers. Thus, the Administration's plan resolves states' major concern about their exposure to providers' suits in Federal court, and does not undermine beneficiaries' ability to enforce their Federal guarantee to coverage and benefits.

On balance, when we assess the three components required to make any guarantee real -- the definitions of eligibility, benefits, and enforcement -- we find that the so-called "guarantee" of Medicaid coverage and benefits contained in the new Republican bill is neither real nor enforceable for beneficiaries. This is not about whether the governors can be trusted. They can be trusted, which is why our proposal offers states unprecedented flexibility in program management and why we have worked with so many states on their innovative demonstrations. The issue is whether an individual, regardless of where he or she lives, is guaranteed meaningful coverage.


The President's second principle for Medicaid reform is an appropriate financing structure -- namely, one that maintains the Federal-state partnership that has been at the heart of the Medicaid program for 30 years. Under this partnership, Federal dollars follow the people, meaning that the Federal government shares responsibility with the states for increased costs associated with increases in enrollment. As with the Federal guarantee of coverage and benefits, the new Republican bill falls far short of meeting this principle.

I have reviewed the components of the new Republican financing arrangement before -- and it was not in the governors' agreement. This newest financing structure is simply the MediGrant 11 block grant formula, dressed up with a tiny embellishment to pay lip service to the governors' principles that funding must automatically adjust for enrollment.

To demonstrate this point, I will walk through each component of the financing structure of the new Republican bill, and I will use this next chart to illustrate my points (Chart C).

Base Allotment

The first component of the Republican funding system is called the base allotment. These allotments, which account for an average of 96 percent of total Federal spending over the 6 year period (as shown on the Chart) are distributed to states based on a formula that includes factors such as "needs-based amounts" and "program need". Given this structure, at first it might appear that each state's base allotment is determined based on its actual need, including enrollment growth and caseload changes.

However, the base allotment is not what it seems. After careful analysis, my staff has concluded that only 5 percent of this 96 percent of funding is actually distributed based on need. The remaining 91 percent is distributed to states based on what is essentially a block grant system. Under this system, states' allotments are determined through the use of "floors" and "ceilings", rather than by the results of the needs-based formula. Each year, between 44 and 49 states' allotments are determined through a floor or ceiling. For these states, the new Republican bill is a block grant, with a new name.

Furthermore even the 5 percent "needs-based" funding does not truly reflect the financial need of states in their Medicaid programs. This is because it is determined by the number of poor people in a state rather than Medicaid enrollment growth. As a result, if the number of Medicaid recipients in a state increases but the number of poor people does not, the state's base allotment would not increase.

Umbrella Fund

The second component of the financing structure is called the "umbrella fund", and it consists of supplemental Federal money that is to be distributed to states with high enrollment growth. But if the Republican umbrella is the states' only protection against the costs Of high enrollment growth, the states are going to get drenched. The entire umbrella fund accounts for only 3 percent of all Federal Medicaid spending; thus, it could provide only a fraction of what states would need in times of recession. in addition, it covers enrollment increases only for the year of the increase -- not for any later years during which the new enrollees continue to receive Medicaid. Thus, if a state suffered a three-year recession that caused its Medicaid enrollment to rise, it could get umbrella funds for new enrollees for their first year, but could be forced to bear the entire cost of these enrollees for any later years during which they remained on Medicaid.

This is shown on my next chart (Chart D). Assume that the recession begins in year 2. As you can see, this recession causes a dramatic increase in the state's enrollment, which triggers an umbrella payment to assist the state in covering the costs of these new enrollees. In year three, however, the state's enrollment remains at the same level as in year two, but this time there is no umbrella payment, because these payments are based only on changes in enrollment from the previous year, not total enrollment. Thus, the state is forced to bear the cost of the much higher enrollment with the same amount of Federal assistance as it received in year one.

Pools for Undocumented Aliens and Indians

The final component of the financing structure is $4.3 billion to assist states in providing care for undocumented aliens and Native Americans. The first pool is allocated across the 15 states with the highest numbers of undocumented aliens. The second pool is allocated among all states that have Indian-funded health facilities or programs.

Changes in FMAP and Taxes and Donations Laws

In addition to replacing the current financing partnership with a block grant to states, the new Republican bill also includes two changes in the way states finance their share of Medicaid costs. It increases the rate of Federal contribution to Medicaid (known as the FMAP) for many states, thereby reducing the amount of funds necessary to collect Federal matching funds. It also repeals the restrictions on states' use of provider tax and donation financing mechanisms.

While these proposals are appealing to many states, they raise significant concerns. Specifically, the proposed changes to the FMAP will raise the Federal share of national Medicaid spending from 57 percent to 63 percent. In addition, the FMAP changes could encourage states to reduce their contributions to the program, resulting in even deeper reductions in total Medicaid spending than this bill suggests. The new Republican bill will reduce total Federal spending on Medicaid by $72 billion over 6 years. But total reductions in Medicaid spending could be far greater. The Center for Budget and Policy Priorities estimates that states could reduce their own spending on Medicaid by about $185 billion over 6 years without decreasing the amount of Federal funds for which they are eligible. Thus, the new Republican bill could lead to a total reduction of approximately $257 billion in Medicaid spending over the next 6 years.

Defining and revising the appropriate Federal and state contributions and spending levels always will be one of the most difficult issues to settle in any Medicaid reform plan. There is no question that these matters merit careful attention in the long-term. The President's plan proposes to gain advice from an intergovernmental advisory commission on the appropriate relationship between Federal and state funding before the Congress proceeds to change the current distribution.

The new Republican bill also would permit unconstrained use of provider tax and donation financing approaches for the "state" share of Medicaid. These are the same financing approaches that were widely used by some states in the early 1990s to increase their Federal Medicaid payments without actually increasing state Medicaid spending. For example, a state would impose a tax on a hospital, and then take the revenues generated and give them back to the hospital calling them "Medicaid payments". The state would then claim -- and receive -- Federal funds to match its payment to the hospital, even though it had not truly spent any additional state dollars.

During the late 1980s and early 1990s, many states took advantage of these types of financing mechanisms, costing the Federal government billions of dollars and helping to drive annual Medicaid spending growth rates to well over 20 percent. Congress responded in a bipartisan fashion by limiting the provider tax schemes and completely outlawing the donations schemes. Now, the Republican bill seeks to remove these restrictions that were passed with overwhelming bipartisan support just a few years ago. Without these restrictions, states would be free to finance significant portions of the state share without contributing any real state dollars, leading to substantially lower support overall for the Medicaid program.

In summary, the new Republican bill fails to meet the President's second principle for Medicaid reform -- a financing structure that maintains the Federal-state partnership that has been at the heart of the Medicaid program for 30 years. Neither does it meet the financing principles agreed to on a bipartisan basis by the Governors. The Governors' proposal reflected a willingness to assume a greater responsibility for the management of the Medicaid program, but only if they had a strong financial partner to help meet the costs. The NGA proposal was designed to provide this Federal-state partnership, and was based on a funding mechanism that protected states from the full costs associated with actual changes in enrollment. The money was supposed to follow the people, in order to protect states from unexpected, uncontrollable enrollment increases. When the latest Republican proposal was released, it did not take the Democratic Governors long to realize that the centerpiece of their deal was no longer part of the mix.

Protecting beneficiaries, families, and taxpayers

This brings me to the President's third principle for Medicaid reform: protections for beneficiaries, families, and taxpayers. Once again, the new Republican bill fails to meet to President's principle.

The new Republican bill would repeal title XIX and create a new title for the Medicaid program. This has the effect of seriously compromising the framework for quality standards, beneficiary and family financial protections that limit families' out-of-pocket costs, and program accountability.

Out-of-Pocket Costs
This bill reduces or eliminates many long-standing family and beneficiary protections. For example, it would permit states to require adult children of Medicaid beneficiaries to contribute to the cost of their care, except for long-term care. in addition, the bill grants states broad discretion to impose cost-sharing requirements on Medicaid beneficiaries. It imposes minimal cost-sharing limits only for certain services to children and pregnant women below poverty, leaving other women, children, and most disabled and elderly fully exposed to potentially serious financial consequences. This lack of limits on cost-sharing is another factor which effectively undermines these persons' "guarantee" of eligibility and benefits.

In addition, while the bill retains current law provisions designed to protect spouses and other relatives of nursing home patients from excessive liability for the cost of care, repeal of the more general cost sharing protections significantly minimize these protections. For example, nursing home residents who have spent down their income to become eligible for Medicaid could be charged any level of cost-sharing to help pay for long term care services. In addition, services included in the nursing home benefit could be reduced, leaving the spouses or children of nursing home residents to bear the full cost of these services. Furthermore, states could charge elderly or disabled persons any level of premium, which could be set so high as to effectively exclude them from the program.

Quality Assurance Requirements for Managed Care

In addition, the new Republican bill makes no mention of quality assurance requirements or monitoring responsibilities for Medicaid managed care. This is a serious concern since Medicaid managed care enrollment is increasing so dramatically. About one-third of beneficiaries now are in managed care, a 140 percent increase in enrollment over the past three years. The President's plan recognizes the need for updating managed care quality standards. It replaces some outdated approaches with a quality improvement program that must include appropriate standards for Medicaid-contracting health plans and data analysis that tracks utilization and outcomes.

Fiscal Accountability

Finally, we recognize that the Federal government finances well over half of Medicaid spending nationwide, at a Cost to Federal taxpayers which is growing to more than $100 billion a year. The Federal government has a responsibility to those taxpayers to ensure that these funds are spent efficiently and appropriately.

Fulfilling this responsibility requires imposing a minimal amount of reporting and monitoring requirements on states. There are ways, similar to the approach taken in the President's plan, that would provide states with expanded flexibility in management and operation of their Medicaid programs, while ensuring accountability for funds at the same time. Unfortunately, the new Republican bill, includes no quality assurance requirements or monitoring responsibilities for Medicaid managed care, and it contains no mechanism to ensure that changes in benefits and cost-Sharing do not jeopardize the sufficiency of coverage. Thus, under the Republican bill, the Federal government will finance a greater percentage of the Medicaid program, but taxpayers will have fewer assurances that their money is being well spent.

In summary, like its predecessor last fall, the new Republican bill fails to meet the President's third principle -- protecting beneficiaries, families, and taxpayers.


Let me conclude by focusing on one fundamental structural issue - whether we approach the task of Medicaid reform by making changes in the current title XIX of the Social Security Act, or by repealing that program and replacing it with a new title. We support reform, not repeal, of title XIX. The potential unintended consequences of repealing and replacing this program are staggering -- for states, beneficiaries, providers, and the Federal government, especially when you consider that it would reopen thirty years of settled litigation. The Congress can address many of the most pressing concerns about any Medicaid reform plan by amending the current law.

We in the Administration believe that Medicaid must be financed through a Federal-state partnership that ensures Federal funding and provides a real, enforceable guarantee of coverage for a defined package of health and long-term care benefits. The President's plan proposes unprecedented flexibility for the states to operate their programs, pay providers, and use managed care and other delivery arrangements, while retaining and revising key standards related to quality and beneficiary financial protections. The President's proposal would achieve those objectives in a way that would also help to balance the budget by 2002.

The last time I testified before this committee, I was encouraged that the governors' bipartisan efforts appeared to be moving us toward a solution that could meet the President's principles. Since that time Moderate Republicans and Democrats in the Senate, and more recently in the House, have worked hard to build on the balanced approach envisioned in the NGA agreements. I am disappointed that the bill before this Committee today is extremely similar to the one that the President vetoed last fall and that departs from the bipartisan agreements reached by the Governors just a few months ago. While we cannot support this bill, I can assure you that we stand ready to work with the members of this committee and the entire Congress to design a reformed Medicaid program that will meet the needs of beneficiaries, states, and taxpayers.

Mr. Chairman, thank you again for the opportunity to testify today and I look forward to answering your questions. *There are 4 charts attached.

Chart A

The President's Medicaid Proposal: Flexibility for States

  • Promote Managed Care
    • Permits enrollment in managed care without waivers
    • Eliminates certain Federal contracting
    • Eliminates 75/25 rule
    • Eliminates Federal review of contracts over $100,000

  • Increase Flexibility in Eligibility/Benefits
    • Permits home and community-based care programs without waivers
    • Allows eligibility simplification

  • Eliminate Federal Provider Payment Rules
    • Repeals Boren Amendment
    • Replaces cost-based payment with federal grants to health centers (FQHCs/RHCs)
    • Eliminates qualification requirements for certain physicians (Ob/Peds)

  • Streamline Administration
    • Eliminates annual state reporting requirements for certain providers
    • Simplifies computer system requirements
    • Eliminates personnel requirements
    • Eliminates cooperative agreement
    • Eliminates duplicative nursing home reviews

Chart B

Principles of Medicaid Reform

  • Enforceable Federal Guarantee of Coverage and Benefits:
    • Guaranteed eligibility
    • Meaningful benefits
    • Federal enforcement

    • Shared Financial Partnership with States
      • Federal dollars follow the people
      • Federal savings to help balance the budget

    • Protections for Beneficiaries, Families, and Taxpayers
      • Limit out-of-pocket costs
      • Assure quality of care
      • Maintain fiscal accountability

    Chart C - (Pie Graph)
    Republican Medicaid Bill: Funding Not Based on Need
    Shows: Block Grant: Floors/Ceilings - 91% of the pie;
    Aliens/IHS Pools - 1% of the pie; Umbrella - 3% of the pie; and
    Block Grant: Need Based Portion - 5% of the pie.
    "Source: DHHS analysis based on legislative provisions of the 5/21 Republican Medicaid Bill. Chart D - (Bar Graph)
    Republican Medicaid Bill: Dollars Do Not Follow People!
    Year 1 Shows the Number of Beneficiaries and Block Grants are even.
    Year 2 Shows the Number of Beneficiaries increased and Block Grants stayed the same as Year 1 and Umbrella Payment is added to Block Grants in order to bring it even with the increased Number of Beneficiaries.
    Year 3 Shows the Number of Beneficiaries at the level that it was in Year 2 and Block Grants at the same level as Year 1 and Year 2 with no addition of Umbrella Payment added.

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