Seniors Could Suffer Under “Block Grant” Medicaid Plan

The Republican-led House recently passed a bill that would change the way the federal and state governments fund Medicaid. These Republican strategists hope to change Medicaid funding into a “block grant” plan as opposed to a plan that matches state Medicaid costs dollar for dollar.

Currently, the federal government will match each dollar a state spends on Medicaid. However, under the new plan, the federal government would annually give each state a fixed amount to spend on Medicaid; if the money ran out, it would be up to the states to make up the difference. The Congressional Budget Office fears that the block grants would not adequately cover state’s Medicaid needs, and the plan would not allow for a state’s grant to increase as a result of raised health care costs.

States would likely have to restrict eligibility for Medicaid, spend their own money, or trim down covered services if the grant money was not enough. Many predict that services for the elderly and disabled would be the first services states would cut because these services require the most money.

Based on of its long experience ensuring that states do not limit eligibility and benefits, the National Senior Citizens Law Center says that the result of block granting Medicaid would mean taking health care coverage away from millions of low-income older adults and people with disabilities.

Millions of Seniors Could Lose Medicaid LTC Coverage Under GOP Plan, Reports Warn, ElderLawAnswers, May 18, 2011.

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this article to my attention.