On January 22, senior Trump adviser Kellyanne Conway said that the President’s plan to replace the Affordable Care Act (ACA) would convert the current funding structure of Medicaid to a block grant program. Under a block grant system, rather than the federal government matching state expenditures at a pre-determined percentage, states instead would receive a fixed dollar amount, regardless of state funds expended. Block grants have been proposed from time to time by Republicans concerned at the open-ended nature of the current system. Paul Ryan (R-WI), currently the Speaker of the House and formerly Chairman of the House Budget Committee, has been a strong proponent of achieving federal cost savings through Medicaid block grants.
Proposals to block grant Medicaid have caused angst among several stakeholders, including by governors who see it as a cost-shift onto states, forcing states to choose between increasing the state share of expenditures, or scaling back on covered populations or services. Louisiana Governor John Bel Edwards (D-LA) said that under a block grant scenario, “flexibility would really mean flexibility to cut critical services for our most vulnerable populations, including poor children, people with disabilities and seniors in need of nursing home and home-based care.”
