Governors React to Medicaid Block Grant Proposal

BLOCK GRANT CONCERNS: Republican governors called the House Budget Committee’s plan to trim $1 trillion from the federal Medicaid budget over the next 10 years, “far superior” to the Affordable Care Act and hailed it for ending the “out of control spending spree of recent years.” Democrats panned the proposal, arguing that it would threaten Medicaid’s integrity and “do little to address cost growth.” Under the House Republicans’ proposal for fiscal year 2012, the federal share of Medicaid would be converted to a block grant to states, ending what they called “an onerous, one-size-fits-all approach.” 

BIG MEDICAID BILLS: A new study by the nonpartisan Council of State Governments and the Rand Corporation assessed the affects of the Affordable Care Act on five states’ health care spending. Four of the states — California , Illinois , Montana and Texas — would see a significant increase in spending from 2016 through 2020. Connecticut , which currently covers childless adults under a state-funded plan, would see a drop in spending as the federal government picks up the tab for their coverage. The study points out that while the planned expansion of Medicaid to cover low-income adults accounts for most of the increased spending, states can also expect more people who are currently eligible for Medicaid to sign up starting in 2014. That is partly because of the individual mandate that requires people to carry health insurance. The federal government will subsidize newly eligible enrollees, but states will have to pay a bigger share for new enrollees who are currently eligible. 

MEDICARE COST SHIFT: Federal deficit analysts are suggesting the U.S. could save $7.6 billion by raising Medicare’s eligibility age from 65 to 67 in 2014. According to a new study by the Kaiser Family Foundation, the change would result in an estimated $4.5 billion increase in state employer retiree health-care costs. In addition, retirees age 65 to 67 would end up paying $5.6 billion more in out-of-pocket expenses, the report says. 

PRIVATIZATION: The Florida House passed a Republican-sponsored bill last week that would make managed care mandatory for all Medicaid recipients in the state, according to

Bloomberg Business Week . The proposal is an expansion of a 2006 pilot program started by then-Governor Jeb Bush. Democrats in the legislature called the proposal a giveaway to big business and charged that the Bush-era pilot program failed to improve care or cut costs. In separate action, Republican Governor Rick Scott ordered a 15 percent cut in funding for programs that serve tens of thousands of residents with Down syndrome, cerebral palsy, autism and other developmental disabilities, the Orlando Sentinel

reported .