Medicaid, the US insurance program for millions of low-income children and adults, has operated for 50 years under a joint state-federal financing system. In exchange for federal funding that covers roughly 50% to 75% of Medicaid program costs depending on the state (the so-called match rate), states agree to administer the program within broad federal guidelines. The Affordable Care Act (ACA) took this combination of federal subsidies and oversight a step further by offering 100% federal funding for those newly eligible under the law’s Medicaid expansion through 2016 (with federal funding now at 95% and ultimately declining to 90%). So far, 31 states have opted into the ACA’s Medicaid expansion, extending coverage to millions and, through heightened public awareness and a streamlined application process, drawing in millions more who were previously eligible. However, Republican leaders are proposing a fundamental reform in Medicaid financing—a shift to block grants.1 Instead of a matching subsidy and federal oversight, block grants would give states an annual lump sum with minimal conditions attached.
Sommers BD, Naylor CD. Medicaid Block Grants and FederalismLessons From Canada. JAMA. 2017;317(16):1619–1620. doi:10.1001/jama.2017.1952