On March 29, the House of Representatives approved the FY 2013 budget, voting 228 to 191 along party lines. Among the provisions in the budget are cuts of more than $800 billion in Medicaid funding and converting it to a block grant program.
Under the block grant program, states would receive a fixed dollar amount, adjusted yearly for inflation and population growth, rather than a share of the state's Medicaid costs. The practical effect of this provision is that states would be forced to make up the difference in funding and, if unable to, would likely have to reduce Medicaid provider payments, restrict eligibility and/or cut benefits.
The budget passed today by the House will be sent to the Senate; however, it is unlikely to pass in the Senate and become law.