How do block grants and per capita proposals jeopardize critical services?
Congressional proposals to convert Medicaid financing from an entitlement program into a state block grant or per capita allotment program would dramatically alter the program and negatively impact individuals with disabilities who meet the program’s eligibility.
The current Medicaid structure entitles eligible individuals to core services and, in turn, guarantees states to federal matching payments with no cap to meet program needs of eligible residents.
The block grant proposal
The block grant proposal would shift Medicaid program costs to states and put Medicaid beneficiaries, including individuals with disabilities, at risk for services.
Under a block grant, federal Medicaid funding to states would be capped, eliminating the current entitlement structure that allows federal funding to respond to changing program needs, such as recessions, epidemics or disasters. This lack of federal funding flexibility would be passed on to states, who — based on their own financial restrictions — may be forced to limit or end current services to reduce costs. A block grant would also likely end the federal core service components that are required in turn for the federal match.
The per capita proposal
The per capita proposal would limit the federal government’s reimbursement to states based on a per-enrollee amount. If state Medicaid costs per enrollee increase, due to health care inflation, epidemic or other health circumstance, these costs would shift solely to states given the federal reimbursement is capped. Reductions in critical services to individuals with disabilities and other Medicaid beneficiaries or higher program premiums would be likely cost-reduction strategies, especially for states that have limited revenue flexibility.