Medicaid and Block Grants

Much discussion and speculation have ensued around the pending GOP healthcare bill.  One of the discussion points is “block grants,” yet most of us have no understanding of what that term refers to or how it might impact healthcare.

Before discussing what block grants are, it would be helpful to know how Medicaid funding works today.  Medicaid serves about 75 million people, including the elderly and disabled, two-thirds of which live in nursing homes and families living near or under poverty level.  Under current federal guidelines, states choose who to cover and what services to provide and costs are shared between the state and federal government.  With the matching mechanism currently in place, the poorer the state, the more the federal government pays.  For example, New York and California get one federal dollar for every dollar they spend; whereas Mississippi gets $2.94 of federal monies for each state dollar it spends.    This system takes the pressure off of states with stressed and/or smaller budgets and also provides an incentive for states to provide Medicaid services to ensure continued federal dollar matching.

Conversely, with block grants, states are granted a set amount of money from the federal government.  There is no consideration given to the affluence (or lack thereof) of the state or guidelines with regard to what coverage and services “ought” to be provided.  Once the state has the funding, then each state can determine who qualifies and for what coverage and services.

The political fight is sure to be intense in this regard:  Some groups are fully supportive of the measure (which has been proposed time and time again for decades) due to the cut in spending it promises to bring.  Other groups vehemently oppose the measure due to the cut in services for vulnerable groups such as children raised in poverty, the disabled and elderly.

This article is written by an attorney at Wyatt & Mirabella, PC. Always consult an attorney before making any legal decisions. To make an appointment today for a free consultation, please click here to contact us.