The news media coverage this week, following Republican presidential nominee Mitt Romney’s announcement of Rep. Paul Ryan (R-WI) as his running mate, has focused predominantly on the impact to Medicare of the Ryan budget proposal. An Associated Press story, “The other Paul Ryan plan: $800B in Medicaid cuts,” puts the focus on the impact to Medicaid, and provides a concise summary.
Under the Ryan budget, Medicare would be converted to a "premium support system,” in which eligible seniors would receive financial assistance to buy health insurance in the private market. Medicaid would be converted to a block grant system, under which states' federal assistance would be capped at a certain limit, and many current restrictions placed on states as a condition of receiving federal funds would be lifted. Medicaid is currently funded with federal funds matching state funds.