Block Grants: A Bad Idea for Medicaid

Updated January 23, 2017: President Trump and his advisors have indicated that they will pursue a Medicaid block grant as part of their attempt to repeal the Affordable Care Act. 

Turning Medicaid into a block grant is not a new or innovative idea. As our fact sheet explains, block granting Medicaid would ultimately mean cuts in services to people who need health care most.

A “block grant” is a fixed amount of money that the federal government gives to a state for a specific purpose. If Medicaid was turned into a block grant, the federal government would set each state’s Medicaid spending amount in advance. That amount would presumably be based on some estimate of state Medicaid spending, but most block grant proposals start with significant cuts in federal Medicaid support.

Why are block grants harmful?

• If a state’s costs exceed the amount of the block grant, it will have to use its own funds to make up the difference, or, more likely, cut services for low-income residents.
• Counter to what proponents claim, block grants don’t give states more flexibility with their Medicaid programs.
• Block grants would make it harder for states to serve their residents’ health care needs.

Download our fact sheet to learn more about how block grants would harm states and their residents.