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Jon Greenberg
By Jon Greenberg January 4, 2019

No block grants for Medicaid

Candidate Donald Trump promised to shift Medicaid into a block grant program as a way to give states more control and curtail spending. Two years into office, no Medicaid block grant proposal has successfully made its way through Congress.

Today, the government's insurance program for the poor is an entitlement. Anyone who qualifies is covered for services defined by Washington and the states. Broadly, the federal government pays half or more of the cost and the states shoulder the rest.

A block grant would dole out money to each state based on a formula, and the formulas so far have led to lower federal outlays. Supporters say states would be more efficient. Critics say there would be less care.

The most recent major effort in Congress tackled only expanded Medicaid, the part of the Affordable Care Act that allowed states to open the program to any low-income adult. The 2017 Graham-Cassidy bill would have created a large block grant to replace money for expanded Medicaid and the private insurance subsidies under the Affordable Care Act.

That bill never came to a vote when it became clear it lacked enough support to pass.

In its FY 2019 budget proposal, Trump's Health and Human Services Department said it "supports the comprehensive Medicaid reform in the Graham-Cassidy-Heller-Johnson bill, including modernization of Medicaid financing and repeal of the Obamacare's Medicaid expansion."

But there was no legislative action on that front in 2018.

And with Democrats controlling the House, it is difficult to imagine a deal under which they would accept converting Medicaid to a block grant.

This is a Promise Broken. That can change based on what happens during the remainder of Trump's first term.


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Lauren Carroll
By Lauren Carroll March 15, 2017

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.

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