The House Republicans' plan to convert federal Medicaid dollars to block grants might allow for greater flexibility among states, but its proposal to reduce payments would likely lead to lower Medicaid payments to providers and less coverage to beneficiaries, according to a long-range analysis from the Congressional Budget Office on Tuesday (PDF).

Earlier, the House Budget Committee released its fiscal 2012 budget, a 10-year financial framework that would cut billions in spending and make significant changes to the Medicare and Medicaid programs.

The 30-page analysis from the CBO—which House Budget Committee Chairman Paul Ryan (R-Wis.) requested—also said that for Medicare, most elderly people would pay more for their healthcare than they would under the current system.

“Although the uncertainty in future federal spending on healthcare would be lessened under the proposal, that uncertainty would be transferred to future beneficiaries,” the analysis stated. “If the volume, complexity, and costs of medical services turned out to be greater than expected, future beneficiaries would pay higher premiums and cost-sharing amount than are currently projected.”

In the Medicaid program, block grants would begin in 2013, and the total dollar amount of the grants would increase annually with population growth and the growth of the consumer price index, according to the analysis. It also found that even though added flexibility to states could result in efficiencies, the system would “probably require states to decrease payments to Medicaid providers, reduce eligibility for Medicaid, provide less extensive coverage to beneficiaries, or pay more themselves than would be the case under current law.”