Governor Terry Branstad and Republican leaders in the Iowa House and Senate are finally poised to eliminate Planned Parenthood’s state funding, a cherished goal Democrats had repeatedly blocked in recent years.

Branstad said during his Condition of the State address on Tuesday that his budget “redirects family planning money to organizations that focus on providing health care for women and eliminates taxpayer funding for organizations that perform abortions.” House and Senate leaders likewise depict their plan as a simple change to reimburse different health care providers, creating “better options for more women.”

What Iowa Republicans don’t broadcast: they are setting the state up to spend ten times more on family planning services, without a reliable funding stream.

REPUBLICANS CANNOT DISQUALIFY PLANNED PARENTHOOD AS A MEDICAID PROVIDER

Planned Parenthood of the Heartland has long been a provider under the Department of Public Health’s Iowa Family Planning Network, which covers pregnancy or pap tests for women and other services for both genders, primarily birth control exams, advice, and supplies, and testing or treatment for some sexually transmitted diseases.

The IDPH budget has no line item for Planned Parenthood. Rather, the Medicaid Family Planning Waiver covers Iowa Family Planning Network expenses. Planned Parenthood of the Heartland receives approximately $2.7 million from public sources for its Iowa work each year, mostly from that Medicaid waiver.

Republicans in some states have sought to disqualify Planned Parenthood as a Medicaid provider, and anti-abortion activists in Iowa have long called on Branstad to do the same. But federal courts have blocked or struck down such efforts in Indiana, Kansas, Arkansas, Louisiana, and Utah. The same court battle is underway Texas. Longtime Supreme Court analyst Lyle Denniston has explained the key legal arguments, which draw from the U.S. Constitution as well as federal Medicaid law.

Iowa GOP lawmakers recognized long ago that cutting out Planned Parenthood would require creating a new family planning program. During the 2015 session, they included the following language in the House version of the health and human services budget (pages 70-71):

DIVISION XIX
DISCONTINUATION OF MEDICAID FAMILY PLANNING NETWORK WAIVER —— ESTABLISHMENT OF STATE FAMILY PLANNING SERVICES PROGRAM
Sec. 94. DISCONTINUATION OF MEDICAID FAMILY PLANNING NETWORK WAIVER —— ESTABLISHMENT OF STATE PROGRAM.
1. The department of human services shall discontinue the Medicaid family planning network waiver effective July 1, 2015, and shall instead establish
a state family planning services program. The state program shall replicate the eligibility requirements and other provisions included in the Medicaid family planning network waiver as approved by the centers for Medicare and Medicaid of the United States department of health and human services in effect on June 30, 2015, but shall provide for distribution of family planning services program funds in accordance with this section.
2. Distribution of family planning services program funds shall be made to eligible applicants in the following order of priority:
a. Public entities that provide family planning services including state, county, or local community health clinics and federally qualified health centers.
b. Nonpublic entities that, in addition to family planning services, provide required primary health services as described in 42 U.S.C. §254b(b)(1)(A).
c. Nonpublic entities that provide family planning services but do not provide required primary health services as described in 42 U.S.C. §254b(b)(1)(A).
3. Distribution of family planning services program funds under this section shall be made in a manner that continues access to family planning services.
4. Distribution of family planning services program funds shall not be made under this section to any entity that performs abortions or that maintains or operates a facility where abortions are performed. For the purposes of this section, “abortion” does not include any of the following:
a. The treatment of a woman for a physical disorder, physical injury, or physical illness, including a life-endangering physical condition caused by or arising from the pregnancy itself, that would, as certified by a physician, place the woman in danger of death.
b. The treatment of a woman for a spontaneous abortion, commonly known as a miscarriage, when not all of the products of conception are expelled.
5. Family planning services program funds distributed in accordance with this section shall not be used for direct or indirect costs, including but not limited to administrative costs or expenses, overhead, employee salaries, rent, and telephone and other utility costs, related to providing abortions as specified in subsection 4.

The Iowa House version of last year’s health and human services budget included the same language (scroll down to pages 81 and 82).

Branstad said his budget “redirects” family planning money–but in truth, GOP politicians will need to find a new and much larger funding source for a state-operated family planning program.

A STATE-RUN FAMILY PLANNING PROGRAM WILL COST TEN TIMES MORE

Under the Medicaid Family Planning Waiver, the federal government pays for 90 percent of contraception and other services covered through the Iowa Family Planning Network. That 9 to 1 federal match will be gone when Iowa creates a state program. So instead of spending about about $300,000 in state funds to secure $2.7 million in federal money, Iowa will have to allocate at least $3 million to keep offering the same services.

GOP lawmakers quietly acknowledged that reality in the 2015 House version of the health and human services budget (page 64, emphasis added):

DIVISION XIII
PROPERTY TAX RELIEF FUND —— BLOCK GRANT MONEYS —— APPROPRIATIONS FY 2015-2016
Sec. 69. PROPERTY TAX RELIEF FUND —— BLOCK GRANT MONEYS —— APPROPRIATIONS. The moneys transferred to the property tax relief fund for the fiscal year beginning July 1, 2015, from the federal social services block grant pursuant to 2015 Iowa Acts, House File 630, if enacted, and from the federal temporary assistance for needy families block grant, totaling at least $11,774,275, are appropriated to the department of human services for the fiscal year beginning July 1, 2015, and ending June 30, 2016, to be used for the purposes designated:
1. To be transferred to the appropriation in this Act for child and family services for the fiscal year beginning July 1, 2015, to be used for the purposes of that appropriation: …………………………………… $ 8,711,805
2. For family planning activities in accordance with the provisions of this Act creating a state family planning services program: …………………………………… $ 3,062,470

Similarly, the human services budget House Republicans approved during the late stages of last year’s legislative session proposed “a new appropriation for FY 2017”: $2,999,305 from the Social Services Block Grant “to the DHS for a state-only Family Planning Program.”

Branstad’s two-year budget blueprint doesn’t show any new spending for family planning; the relevant section begins on page 95. David Roederer, head of the Department of Management and Branstad’s main budget architect, confirmed to Barbara Rodriguez of the Associated Press that the administration expects the program would cost about $3.4 million a year. The governor’s spokesperson Ben Hammes has been giving me the silent treatment for weeks, but he told Rodriguez the state will spend federal Social Services Block Grant money on the new family planning program.

That plan has a couple of big flaws.

SHIFTING FEDERAL FUNDS TO FAMILY PLANNING WOULD HURT THOUSANDS OF NEEDY IOWANS

States “have broad discretion over the use” of Social Services Block Grant funds, Karen E. Lynch explained in this Congressional Research Service backgrounder last year. A 2012 study by Walter R. McDonald & Associates showed how varied the allocations are from state to state. Iowa’s Department of Human Services reported using 42 percent of its Social Services Block Grant money for individuals with disabilities and 45 percent for case management services. To be precise, the 2012 report (page 73) showed Iowa had spent $16,679,978 in Social Services Block Grant funds the previous year, of which:

■ $12,545,915 supported “special services” for 47,933 disabled people

■ $2,125,715 supported case management for 17,867 children

■ $1,065,917 covered administrative costs

■ $835,652 supported foster care for 3,001 children

■ $75,052 supported “other services” affecting 32,304 people

■ $31,727 supported protective services for 2,496 adults

The Iowa Department of Human Services explains on its website (emphasis added),

In Iowa, SSBG dollars do not fully fund any type of service, but it is combined with other state, local, and federal funding sources to provide services to Iowans. For example, the largest portion of Iowa’s SSGB allocation goes to county governments with an approved county management plan for what in Iowa we call “local purchase” and in the federal report it falls under the category, “special services-disabled”. Local purchase dollars are used by counties to pay for community-based residential services for persons with mental illness, intellectual disability, or a developmental disability.

This document shows how the DHS allocated $15,301,277 in Social Services Block Grant funding during the last fiscal year, which ended on June 30, 2016. An estimated 84,280 Iowans, including more than 43,000 children, benefited from services supported by this grant.

If Iowa Republicans take $3.4 million from the Social Services Block Grant for a new family planning program, they will have to either replace that money somehow or cut many Iowans off from foster care, residential services for people with mental illness or disabilities, and so on.

Branstad’s mouthpiece gave the AP’s Rodriguez a none-too-convincing reassurance:

Hammes said there’s extra money to accommodate the family planning expenditure and it wouldn’t affect other social services, though he said he did not have documentation. He added in an email that DHS, which oversees the grant, “has the cushion to fund a $3.4 million state-run Family Planning program,” while maintaining current social services.

Amy McCoy, a DHS spokeswoman, said she did not have an immediate response, but that the department continues to review the governor’s budget recommendations.

About those recommendations: Branstad has asked state lawmakers to cut nearly $20.3 million from the DHS budget between now and June 30 (page 74). For the next two fiscal years (page 97), he proposes no increase or cuts for several large line items, such as State Supplementary Assistance and Adoption Subsidy.

Of course Hammes doesn’t have “documentation” to prove DHS has extra cash lying around for a state-run family planning program. Administrators will be scrambling to support existing services.

In all likelihood, the budget cuts won’t be limited to the state level.

THE FEDERAL FUNDS REPUBLICANS ARE COUNTING ON MAY DISAPPEAR

Did you notice that Iowa DHS reported using $16,679,978 in Social Services Block Grant funds for that 2012 study but only $15,301,277 for fiscal year 2016? What’s up with that?

During 2011, Iowa still had some money available from a supplemental block grant appropriation related to major flooding here in 2008. Lynch’s piece for the Congressional Research Service discussed that supplemental on pages 23 through 25.

Congress won’t be increasing Social Services Block Grant funds again. On the contrary, nominal funding held steady at $1.7 billion annually from 2001 through 2013 (a decline in real terms because of inflation and rising costs for service providers). The last few years, funding has fallen:

SSBG appropriations for each of FY2013-FY2016 have been subject to sequestration, a spending reduction process by which budgetary resources are canceled to enforce budget policy goals. The FY2016 operating level for the SSBG is roughly $1.584 billion post- sequester. This is roughly $116 million (7%) less than the SSBG’s FY2016 pre-sequester funding level of $1.700 billion and $9 million (0.5%) more than the SSBG’s FY2015 post-sequester operating level of $1.576 billion.

Ladonna Pavetti and Ife Floyd pointed out in an article for the Center on Budget and Policy Priorities last year,

Under current law, sequestration of mandatory programs will continue through 2025, thereby automatically reducing the SSBG’s annual authorized level below $1.6 billion for each of the next nine years.

Lynch showed Iowa’s allotment for this block grant was $15,363,248 in fiscal year 2014, $15,319,626 in 2015, and $15,353,039 (page 13). That’s not exactly what the DHS reported for the last fiscal year, but it’s in the ballpark.

It gets worse. Lynch recounted how the GOP-controlled U.S. House approved a budget resolution and legislation calling for repeal of the Social Services Block Grant in 2012. Committee reports asserted that the grant supported “duplicative” services and that states didn’t need to match the funding or prove programs were effective. The block grant survived because the U.S. Senate (still under Democratic control in 2012) didn’t act on the House bill.

Republicans now enjoy a Senate majority and will have an ally in the White House after January 20. The Social Services Block Grant could become a casualty of unified GOP power in Washington.

The House Republican budget for this fiscal year called for eliminating the grant, which the Ways & Means Committee chair considers a “slush fund” supporting “duplicative” services not targeted at needy people. Though the House did not adopt such language in 2016, public policy experts who follow the issue are watching with concern.

If the Social Services Block Grant ceases to exist, Iowa lawmakers will have to replace $3.4 million for their family planning program and nearly $12 million that would no longer be available for vulnerable children and adults.

Even if a Republican Congress spares this grant, funding will likely decrease further, not only because of the sequester. “Funding Erosion Is Intrinsic to the Block Grant Structure,” according to a Center on Budget report by Isaac Shapiro, Bryann DaSilva, David Reich, and Richard Kogan.

Block grants’ basic structure makes them especially vulnerable to funding reductions over time. Block grants generally give state and local governments very broad flexibility over their use of federal funds. As a result, the funds are used in diffuse ways and their impact is hard to document. Often, it is difficult even to track in detail how the money is used. That, in turn, makes it easier for policymakers seeking resources for their own priorities to look to block grants for savings, and has made block grants particularly vulnerable to funding freezes for years on end. It should come as no surprise that block grants in general have fared very poorly in the competition for resources.

TAKEAWAYS

Although Iowa Republicans have mostly avoided scrutiny of their plan’s up-front and hidden costs, defunding Planned Parenthood’s non-abortion services is already immensely unpopular.

The [February 2016] Iowa Poll shows that 74 percent of Iowa adults want the state to continue paying Planned Parenthood for health services other than abortion. Just 22 percent oppose such payments. Even among Republicans, a slight majority support continuing the payments. […]

The Iowa Poll shows that Republicans are split on the issue, with 51 percent favoring continued state financing of non-abortion services at Planned Parenthood and 48 percent saying it should be ended. Among Democrats, 94 percent favor continued funding, while just 4 percent oppose it. Political independents favor state financing of such services by 75 percent to 19 percent.

Iowans for Life Executive Director Maggie DeWitte discounts that poll finding. She told the Des Moines Register’s William Petroski last week that “there would be a different response if Iowans were informed that there are other qualified Iowa health centers that provide the same services without abortions.”

DeWitte is wrong to claim Iowa has enough health care providers to absorb the demand Planned Parenthood clinics meet for contraception services, well-woman care, STD testing, and more. Bleeding Heartland will cover that myth another day.

For the sake of argument, let’s assume low-income women and men have plenty of other options.

Iowa lawmakers would still be spending $3.4 million a year for the same level of services their constituents receive at one-tenth the cost to the state budget through the Medicaid waiver today.

In the best-case scenario, the state-run family planning program would blow a $3.4 million hole in a funding stream that could otherwise be spent on adults with mental illnesses or disabilities, or kids needing foster care or DHS caseworkers.

In the worst-case scenario, the Social Services Block Grant could vanish by an act of Congress, leaving the DHS to cover a pricey family planning program out of its own tight budget.

Fixing what ain’t broke would be a costly mistake for Iowa.

UPDATE: Barbara Rodriguez followed up on this story for the AP on January 15:

Ben Hammes, a spokesman for Branstad, originally insisted that services provided by this roughly $15 million fund would not be affected. He backtracked after reviewing documents provided by AP.

Amy McCoy, spokeswoman for the Iowa Department of Human Services, said core services such as foster care wouldn’t be affected by Branstad’s proposed cut, which would take effect for the budget year beginning in July. But she confirmed the governor’s plan would mean less funding for preventative programs that reduce the chance of children entering welfare and the juvenile justice system.

In the end Branstad’s overall budget for child and family services for the next budget year — which will be about $127 million — will be $2 million less than what’s estimated for this current budget.

Remember, no one can be sure the Social Services Block Grant will still exist after the federal fiscal year 2018 begins on October 1. Congress could eliminate it or drastically reduce its funding.