President-Elect Trump May Propose to Block Grant Medicaid | Johnson Hobbs Squires LLP
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President-Elect Trump May Propose to Block Grant Medicaid

Repealing the Affordable Care Act, aka Obamacare, was one of Donald Trump's signature campaign health care promises. But his election, coupled with Republican control of both the House and Senate, means that there will also almost certainly be a new GOP effort to turn the Medicaid program into a system of block grants to states. Under such a system, states would receive a lump sum of federal money to provide health care to low-income people, in contrast to the open-ended entitlement that Medicaid is today, with the federal government matching every dollar that states spend.

In March, as he was closing in on the GOP nomination, Trump unveiled a seven-point health care reform plan that included block granting Medicaid. His platform, found on his campaign's website, pledges to "Maximize flexibility for states via block grants so that local leaders can design innovative Medicaid programs that will better serve their low-income citizens."

Turning Medicaid into a block grant system was proposed in 1995 by then-House Speaker Newt Gingrich, in 2003 by President George W. Bush, and, most recently, in 2011 by House Republicans. Under the House Republican plan, starting in 2013 states would have received a fixed amount every year, which would only increase with population growth and the overall cost of living, not with economic conditions. At the time, the Congressional Budget Office forecast that by 2022 federal funding for Medicaid would fall 35 percent below what the federal government was then providing states, and the shortfall would be 49 percent by 2030. States could make up for this dramatic loss in funding by restricting eligibility for Medicaid (including nursing home coverage), reducing covered services, and cutting already-low payment rates to health care providers.

A minimum of 60 votes would likely be needed to bring a block grant bill to the Senate floor for a vote. However, Representative Tom Price, Trump's choice for Secretary of Health and Human Services (HHS), could set up demonstrations of Medicaid block grants in selected states without Senate approval.

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