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What’s a Block Grant? Maybe a Massive Change for Medicaid

February 18, 2017

We’re all familiar with toy building blocks, blocks of cheese (mmm, gouda), and neighborhood block parties — but what about block grants? If you need to brush up on your legislative knowledge, no worries, because we’re here to get you up to speed. 

A block grant is money the federal government gives to states for them to use across a wide range of services as they see fit.

Block grants are like Lady Gaga — they have their share of supporters and critics alike. Supporters argue that block grants put the power of the people back in the hands of the people by letting the states control their own dollars. Supporters think the lump sum of money will be better managed because states will know how to allocate their funds efficiently. Critics contest that block grants can be used as a “backdoor” to reduce spending on things state officials don’t want to pay for — like Medicaid. Critics think block grants will make it harder for those in need to receive care.

Here’s how it all connects.

Today, 75 million Americans are currently covered by Medicaid. Medicaid (the government-funded program that assists low-income families or individuals in paying for medical and custodial care) was intended to be expanded under the ACA in 2010 to insure more people.

But now that there’s a new president in town, both the future of the ACA and how Medicaid will be funded are hanging in limbo. President Trump and his Republican-led Congress have explicitly stated that they want to turn control of Medicaid to the states and put a cap on how much the federal government spends on the program each year.

What would block grants mean for Medicaid?

  • Fixed federal grant amounts will vary by state, with the grant growing each year slightly to be adjusted for inflation.
  • Under a block grant states will have more freedom to decide who qualifies for Medicaid and for what services.
  • More than 10 million people who are currently on Medicaid under the ACA could lose their eligibility.

If you’re a Medicaid recipient, block grants will obviously affect you directly — but even if you aren’t, block grants can still have a small impact on your life. In 2015, the Medicaid program accounted for 17 percent of the nation’s healthcare spending, and that money comes from, you guessed it — your taxpayer wallet.

Regardless of your opinion on Medicaid reform, pay attention to this debate because no matter the outcome, it will affect your fiscal health.

North Carolina’s in-state funding for Medicaid covers specific populations (like children, certain pregnant women, and parents with dependent children). State or federal funding aside, one way to help Medicaid recipients afford healthcare is to drive down the overall price of health insurance. How? By rolling back state-based mandates that drive up costs. Agree? Join us.


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