Since the 1900s, Congressional Republicans have proposed block grant style funding for Medicaid. A block grant is a fixed amount of money allocated from the federal government to states in order to support social assistance programs. On Tuesday, March 17, 2015 Republican Tom Price, chairman of the House Budget Committee, proposed another block grant budget. If approved, the proposed budget will cut assistance to public programs, while simultaneously increasing the defense budget in an effort to balance federal spending over a decade. By turning public aid programs over to individual states by 2021, he hopes that restructuring these programs will force states to spend more efficiently.

The proposed budget design is modeled on the 1990s welfare reform, which created block grants for the Temporary Assistance for Needy Families (TANF) program. As a result, in the 1990s TANF spending remained stagnant while more Americans, who were previously eligible for benefits, fell deeper into poverty. Similarly, the current budget proposal will cut spending to SNAP and Medicaid by following a parallel block grant model. Last year, as an expandable program, SNAP spending increased to $78 billion dollars as more Americans became eligible; however, the proposed budget would prevent another surge in SNAP spending by determining a fixed amount for the budget, potentially denying previously eligible low-income Americans from receiving benefits. The proposed budget includes cutting SNAP funding by about $1 trillion.

In his effort to balance the budget, the Republican house proposes cutting $5.5 trillion over ten years to public programs that benefit vulnerable Americans. These cuts involve:

  • Repealing the Affordable Care Act (ACA)
  • Reforming the Tax Code
  • Cutting funding to Medicare and Medicaid
  • Eliminating Medicaid expansion

The result of these cuts include:

  • Adults living between 100% and 138% of the Federal Poverty Guideline will be no longer be eligible for Medicaid;
  • About 37 million Americans could lose or be denied health insurance and other critical benefits.

Republicans predict that these cuts will save hundreds of billions of dollars within the decade. By cutting funding to critical benefits that affect the health of many vulnerable Americans, $2 trillion will be saved by repealing the ACA and $913 billion by turning Medicaid into a block grant program. There is also a $150 billion estimated savings by transitioning Medicare to a voucher program for anyone 56 years old or younger, after 2024. Despite medical costs rising and the general population aging, the proposed block grant funding would allocate a fixed amount of funding, which would only increase to account for inflation or a growing population.

For more information on the proposed budget please see the New York Times, Huffington Post, Modern Healthcare, and Politico.