While President Donald Trump’s efforts to repeal and replace Obamacare have dominated the news, he also plans to reform a larger and arguably more broken program: Medicaid. In an interview with NBC’s “Today” show, Trump advisor Kellyanne Conway said Trump wants to “block-grant Medicaid to the states” to ensure “those who are closest to the people in need will be administering.”
Conway’s comments echo Trump’s campaign promise to “maximize flexibility for states via block grants so that local leaders can design innovative Medicaid programs that will better serve their low-income citizens.” Block grants would cap federal Medicaid funding and let states decide how to use those dollars. It would introduce flexibility and budget discipline to a program that sorely needs both.
Medicaid Soaks Money Away From Other Priorities
Since its inception in 1965, Medicaid has operated as an open-ended entitlement. The more state Medicaid programs spend on health-care programs for designated recipients, the more the federal government reimburses them. On average, states receive $1.33 for every $1 they spend on Medicaid.
While Medicaid’s current framework sounds like a generous deal for states, Medicaid’s funding formula incentivizes policymakers to expand the program at the expense of core state government functions. A report by the Mercatus Center shows that as Medicaid’s share of state budgets grow, state spending on roads, schools, and public colleges shrink.
Today’s Young Voices Podcast features Young Voices Executive Director Casey Given and YV Advocate Charlie Katebi on the future of Obamacare. Charlie weighs in on the potential negative consequences of letting the insurance market fall into disarray.
As President-elect Donald Trump prepares to enter the oval office, Sen. Mike Enzi (R-Wyo.) hopes to weaken ObamaCare through a process known as budget reconciliation. This will repeal most of ObamaCare but leave the law’s onerous insurance regulations in place and potentially worsen our already dysfunctional healthcare system.
Budget reconciliation is a parliamentary maneuver that allows Congress to pass budget-related bills with only 51 votes. Enzi plans to use this process to override a potential filibuster from Democrats and repeal ObamaCare’s tax and spending provisions, such as the individual mandate, employer mandate, health insurance subsidies, and Medicaid expansion.
“Congress already passed a repeal of ObamaCare in early 2016 using the same process, but President Obama vetoed the legislation,” said Enzi’s spokesman, Max D’Onofrio. “With a new president incoming who favors ObamaCare repeal, Congress has made it a priority to repeal and replace ObamaCare. This will provide relief to Americans whose premiums have risen wildly and who no longer have the healthcare options they had in the past.”
However, repealing ObamaCare’s subsidies and taxes without also scrapping its insurance regulations could make health coverage even more expensive.