One of the ideas that Republicans have pushed forever is returning control to the states on a wide range of policy issues by turning federal programs into block grants that the states can use as they see fit. That’s one of the primary ideas in the Graham-Cassidy bill to repeal Obamacare. But as Peter Edelman explains, this is always a pretext for drastic funding cuts to those programs.
This one makes large use of block grants, a long-standing Republican idea to promote “state flexibility.” The concept might sound good, but in reality, it would be disastrous for the millions of low- and moderate-income people it purports to help.
The Cassidy-Graham bill adds a new coat of paint to the Republican repeal-and-replace effort, but the content is still poison. It would slash the ACA’s Medicaid expansion and premium subsidies by $243 billion between 2020 and 2026, and then completely end federal funding in 2027. It would also turn these provisions into a block grant, which lends states enormous leeway in spending the money. On top of all that, the bill would hit each state’s federal Medicaid spending with a per-person limit, allowing states to receive pre-ACA Medicaid dollars in the form of block grants for non-elderly, non-disabled people.
Those facts should end the discussion. But it’s still worth diving into the destructive potential of block grants. We’ve had them since the days of President Richard Nixon, and all of them — tiny compared with those Cassidy-Graham would enact — have come to the same end: programs withering on the vine and, in some cases, no accountability for spending of federal money.
And he’s hardly alone in making this warning. All 50 state Medicaid directors — and bear in mind that about 2/3 of the states are controlled by Republicans — signed a letter saying that “the per-capita caps and the envisioned block grant would constitute the largest intergovernmental transfer of financial risk from the federal government to the states in our country’s history.”
This whole argument about federalism is mostly a ruse. They always talk about states having “flexibility” to address their specific needs, but what differs in regard to this specific type of program? Health insurance operates essentially the same way in every state, people have the same medical needs in every state. The degree of the need may change because one state has more people in need of Medicaid or subsidies, but block grants don’t do anything to help that situation than the exchanges already do.