Block Grants and Medicaid 11/23/2011 08:57 AM CST
Several of the Republican presidential candidates and many Republican members of Congress want to change the way Medicaid is funded from the current open-ended system to a "block grant," claiming that it would save the federal government more than $500 billion over the next ten years. They are probably right about the savings to the federal government, but they would shift an ever growing burden onto the states.

Below is a summary of my limited understanding of how the program works now and how Republicans propose to change it.

Currently, the federal government and the states share the cost of providing health care to the uninsured poor those with certain developmental disabilities. The federal government pays more than half the cost, and the states administer the program. In return, the states must meet certain minimum requirements.

The Republican proposals would change the system to give the states a fixed sum based on the current cost without increases in the future for population growth or inflation. As populations and medical costs gradually increase, the states would pay a larger and larger portion of the bill each year. The Republican proposals would also remove the minimum requirements that states must meet under the current system. Republicans say that states will be able to find additional costs savings if they are not bound by federal requirements.

States would surely provide fewer and fewer services as their share of the cost increases. It would be devastating for the poorer states, i.e., the states where good Christians normally vote Republican and where they hate helping the poor.

It's the sort of thing that a political candidate can say in 30 seconds without the need to explain in detail, leaving most voters with the impression that it is a painless way to cut the deficit.
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Re: Block Grants and Medicaid 11/23/2011 03:02 PM CST

I imagine when the states complain of the burden, the whole thing will be dissolved. Or so I would hope.
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