House and Senate Republicans have proposed that Medicaid be turned into a capped state block-grant program to save hundreds of billions of dollars over a decade. But political observers predict the proposal won't be seriously considered unless Republicans win the White House and hold Congress in the 2016 elections.
The Medicaid block-grant proposal would cut federal funding by $913 billion over the next decade, according to the House budget plan. The annual increase in overall block-grant funding would average about 4.7 percentage points less than Medicaid's current projected growth rate over the next 10 years, according to an analysis by the left-leaning Center on Budget and Policy Priorities.
Under the GOP block-grant model, the federal government would make a fixed contribution to the states that would rise annually with general inflation and population growth but would not necessarily keep pace with rising Medicaid costs. This would give states the flexibility to do what they want with their Medicaid programs, including customizing delivery systems and reducing eligibility and benefits.
“State legislators and governors know far better than Washington what their citizens need and how to offer it,” according to the budget blueprint laid out March 17 by House Budget Committee chairman Tom Price (R-Ga.). Both the House and Senate budget plans also would repeal the Affordable Care Act and its expansion of Medicaid to adults with incomes up to 138% of the federal poverty level.
But the chances of enacting the block-grant proposal and repealing the ACA while President Barack Obama is in office are close to zero, many political observers say. “The (Republican) game is to survive Obama as best as we can and take the White House and then change can happen,” said Bradley Blakeman, a principal at the 1600 Group who was a staffer for President George W. Bush.
“These guys know it will never get through,” said Robert Weiner, a Democratic strategist and former White House spokesman.
The proposal also will be resisted by governors, including Republicans, because they know block-granting Medicaid would put greater financial burdens on the states, experts say. Governors would be on the hook for tough decisions about cutting eligibility and benefits when federal payments fall short under block grants.
“At the end of the day, this is a cap,” said Elisabeth Wright Burak, senior program director at Georgetown University's Center for Children and Families. “Things like economic downturns are not taken into account.”