“The Centers for Medicare and Medicaid Services announced on Thursday they would accept applications from states that want to set up a Medicaid block grant, a long-held goal of ideological conservatives who want to scale back the social safety net, and one deployed successfully to severely limit cash welfare benefits in the 1990s.
These spending caps would fundamentally change how the program is financed, ending Medicaid’s days as an open-ended entitlement by putting new hard limits on how much the government is willing to spend on health care for certain enrollees. Medicaid would no longer pay whatever is necessary to provide medical care to the people in or near poverty who qualify for its benefits. Instead, spending would be limited in states that got a waiver from the federal government, and they could impose cuts on benefits.”
“Conservatives say block grants are a good way to rein in government spending (Medicaid is one of the biggest federal line items) and to give states more control of the program (it has always been a shared state-federal responsibility) to make it work best for their populations. In practice, the likely effect is lower Medicaid spending and fewer benefits.”