Trump endorses GOP bill that caps Medicaid spending, but not through block grants
As part of his health care campaign platform, President Donald Trump promised to change the funding structure for Medicaid, the government-run health insurance program that primarily serves poorer Americans.
Under current law, state governments reimburse medical providers who serve Medicaid patients, and the federal government in turn reimburses state governments for a portion of those costs. Trump said he wants the federal government to instead fund Medicaid through "block grants" to the states — a popular Republican proposal that would provide states a fixed amount from the federal government to spend however they want, as opposed to reimbursing them for specific services provided.
Trump has endorsed the House Republican bill to replace the Affordable Care Act, or Obamacare. This bill would dramatically change the funding structure for Medicaid.
But as to Trump's specific promise, the plan does not include block grants.
Like a block grant, the leading GOP proposal places caps on the amount the federal government gives each state year to year to cover Medicaid. But unlike a block grant, the cap would fluctuate with enrollment.
The bill would establish per capita caps, another policy idea popular with Republicans. This would limit the federal government's grants based on the number of people enrolled in Medicaid in that state and the consumer price index for medical care, a way of measuring price changes among medical products and services.
Administering Medicaid through a per-enrollee cap tied to the consumer price index means that a state's grant would go up if more people enrolled in Medicaid or if the price of medical services went up generally. But if a state wants to do something like pay Medicaid doctors more or offer new benefits to enrollees, the state likely would have to cover those costs itself, with no additional federal support.
Of course, this bill is in its early stages, and there are several indicators it faces an uphill battle. And if it does become law, the change to Medicaid wouldn't start until 2020. But because Trump is pushing hard for Congress to pass it, we're rating his promise to administer Medicaid through block grants Stalled.
CBO, American Health Care Act cost estimate, March 13, 2017
House Energy and Commerce Committee, AHCA section-by-section summary, accessed March 14, 2017
Kaiser Health News, "Everything You Need To Know About Block Grants — The Heart Of GOP's Medicaid Plans," Jan. 24, 2017
New York Times, Upshot, "How Would Republican Plans for Medicaid Block Grants Actually Work?" Feb. 6, 2017