Healthcare Business News

Some expect renewal of '90s Medicaid battle

By Rich Daly
Posted: February 28, 2011 - 2:30 pm ET

A return of the 1990s battle to transform Medicaid from a federal-matching program into a block-grant approach is expected by liberal healthcare policy advocates. And the stakes have risen since then, they argue, because a block grant conversion now would undermine the Patient Protection and Affordable Care Act.

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“Converting Medicaid to a block grant is fundamentally inconsistent with the Affordable Care Act,” Robert Greenstein, president of the Center on Budget and Policy Priorities, said during a Monday call with reporters.

The Republican majority in the House of Representatives has yet to propose such a transformation of the federal-state low-income insurance program, which was an initiative over which the 1995 Republican-led Congress unsuccessfully fought President Bill Clinton.

Greenstein and others expect a new push to convert Medicaid into a block grant or another type of cap on federal funding as state governors struggling with looming budget deficits look for savings from the healthcare program, which has become the single largest line item for most states. Some Republican governors have called for a switch to block grants.

Greenstein and other liberal healthcare advocates warn that block grants are designed to provide predictability only for the federal government and would significantly shift both financial risks and costs to the states.

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