Block Grants by Heleni Smith

A popular item on the republican agenda is turning Medicaid into a block grant program. While this is generating a lot of discussion, it is not the first time the issue has been addressed. President Ronald Regan and President George W. Bush both tried to implement the same changes. What exactly is a block grant program? Let’s begin with a few clarifications. Medicaid is an entitlement program-if an individual meets the eligibility criteria then he or she is guaranteed a spot in the program. It is currently administered by the states and financed by both federal and state government. The government has agreed to co-finance Medicaid as long as states cover specific groups of people, for example children. Switching to block grant financing would restrict the states’ ability to rack up the bill. The federal government would provide annual lump sums, and it would be up to the states to allocate them efficiently. Extra costs would then be the sole responsibility of the states. The democratic opposition fears that such a switch would lead to Medicaid being unable to maintain its current number of enrollees, let alone add more as the health reform bill suggests. If put to a vote, block grants would likely make it through the House, but fail to make it through the Senate.