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Medicaid Expansion: Will Block Grants Burden States, and Reduce Healthcare Access?

Medical insurance and Medicaid and stethoscope.Healthcare in America has gotten a lot of press recently, and most people wonder if the attempts to repeal the Affordable Care Act should be getting so much attention. While replacing federal Medicaid funding with block grants is one proposal that may help millions of Americans, many people aren’t sure which would have the best long-term consequences.

Block grants show potential for long-ranging effects including cuts to entitlement programs like Medicare and Social Security. House Speaker Paul Ryan and Health and Human Services Secretary Tom Price have supported the conversion of federally funded Medicaid into a block grant for each state. Although this proposed solution could save up to an estimated $10 trillion over the course of 10 years, the cost may also include a loss of services to the elderly, pregnant women, children, and people struggling with poverty.

Taking a Look at Medicaid

The health insurance program known as Medicaid is jointly funded at both the state and federal level. It covers the cost of healthcare for low-income Americans however, it does include factors of eligibility including citizenship, income and disability. While states are not required to participate in the Medicaid program, every single one has done so since 1982.

So many segments of the American population have benefited from Medicaid services. Here are just 5 highlights of the healthcare program:

  • According to the AARP, about 65% of nursing home residents are supported by Medicaid.
  • According to the Kaiser Family Foundation, as of 2015 an estimated 39% of children in America have healthcare through the Medicaid program.
  • According to MedPac, over 10 million people with disabilities have access to healthcare and home care services through Medicaid.
  • A report by the National Bureau of Economic Research noted that Medicaid benefits were associated with improvements in children’s education. The report indicated that children who had Medicaid benefits were also more likely to complete high school, as well as college. This also improved their long-term earning capacity and overall health.
  • Medicaid has been associated with home care service workers. Through Medicaid, home caregivers are able to continue to work and support their families.

Medicaid doesn’t just affect people who meet all of the eligibility requirements. In fact, the Medicaid program is known to benefit American society as a whole as it promotes the overall health and wellbeing of millions of people while also contributing to the earning potential of Americans, supporting their communities.   

Are There Any Changes to Federal Funding?

Currently, Medicaid is structured as an entitlement, which means that every person who qualifies in the U.S. is entitled to healthcare benefits. The program was then increased to include more people under the eligibility requirements of the Affordable Care Act. According to the Kaiser Family Foundation this broader eligibility requirement now includes almost 75 million Americans!

Currently, both state and federal funds are combined to cover the total cost of the Medicaid program. However, if the block grants continue and cap the amount of federal money Medicate allows each state, this could give individual states the power to limit, reduce or eliminate health benefits for people completely. And while Republicans will argue in favor of the block grants, claiming it could offer states more choices and promote innovation, states have already shown flexibility in how the services are covered. This includes how the providers are paid, how the services are delivered, and the eligibility structure. The “improvements” in state flexibility allows for each state to decide for themselves just how they will make up for federal funding shortfalls. Which services will be cut? Which payments will be denied? And which taxes will be increased? Which programs will be cut? These are all very important questions posed at the state level for citizens.

Senator Elizabeth Warren, D-Mass. made it clear that she is opposed to block grants and its associated entitlement programs. Senator Warren said, “If people need healthcare, we need to find the most effective and economical ways to do it, but we make sure we’re able to deliver healthcare. We don’t say you’ve met some arbitrary cap for the state of Massachusetts and now you’re done,” as reported in the Politico.

What’s the Right Decision?

Cutting $1 trillion from federal Medicaid spending could result in some very high costs from American society which may negatively impact the lives of people in our communities including those lacking even the most basic healthcare. This could include children without pediatric care, seniors that don’t have a caregiver, and people with disabilities. The loss of healthcare for people like this in our communities could cause a loss of independent living for some. So, what will the decision be? Eliminating collaborative federal funding may only cause the implementation of block grants, putting even more citizens at risk of losing their quality of life. But today, the necessary programs and benefits may be threatened. It is an important decision, that we will all wait to see resolved, albeit anxiously.

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