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April 25, 2017

Medicaid Block Grants and Federalism: Lessons From Canada

Author Affiliations
  • 1Department of Health Policy and Management, Harvard School of Public Health, Boston, Massachusetts
  • 2Division of General Medicine and Primary Care, Brigham and Women’s Hospital, Boston, Massachusetts
  • 3Department of Medicine and Institute for Health Policy, Management and Evaluation, University of Toronto, Toronto, Ontario, Canada
JAMA. 2017;317(16):1619-1620. doi:10.1001/jama.2017.1952

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.