Quite a bit has happened over the past 72 hours. In case you spent the weekend unplugged….President Donald Trump signed an executive order that, as the Los Angeles Times explained – directs “federal agencies to use their authority to relieve individual Americans, businesses, state governments and others from “burdens” placed on them by the Affordable Care Act (ACA), commonly known as Obamacare.
In short, it is the first step toward repealing Obamacare. From Money Magazine:
The order offers few specifics, but in a few paragraphs, it does give agencies affected by the ACA the authority to waive or delay implementation of any part of the law that would “impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden” on individuals, insurers, drug companies, etc.
It also promotes the creation of a system to allow the sale of insurance across state lines, something Republicans have said will increase competition in the health care market.
According to the New York Times, part of the the Trump administration plan that would replace Obamacare, if and when it is repealed, will “propose giving each state a fixed amount of federal money in the form of a block grant to provide health care to low-income people on Medicaid.”
Converting Medicaid from a ‘jointly funded’ program (between states and the feds) into a block grant program, would likely mean sending a set amount of money to each state and allowing each state to decide how to implement and disburse the Medicaid funding. This will likely lead to some lively debates in the weeks and months to come. CNN explains ‘block grants’ like this:
“Block granting Medicaid funds to states has long been a popular reform among conservatives, but it’s a polarizing proposal that would mean a dramatic change in the way the program is funded. Block grants could allow states more flexibility in the way they spend Medicaid funds, but also create a number of additional problems — how to determine the amount of money each state receives, how to account for changes in enrollment during economic downturns, and how to regulate the way that states spend the funds.”
The Washington Post suggests turning Medicaid into a block grant would result in less funding (for the program) and listed three key reasons for that claim:
1. Data shows that the move to block grants leads to less funding over time.
- Historical data suggest that a shift to block grants would result in a gradual decline in Medicaid funding. A 2016 report by the Center on Budget and Policy Priorities (CBPP) showed that when the federal government uses block grants, the funding for the programs shrinks over time.
2. Reformers argue that block grants need less funding because they reduce costs. But they don’t.
- When reformers propose switching a program to a block grant, they increasingly ask to have the funding reduced at the same time.
3. Block granting leads to drops in funding because the policies don’t get regular tuneups.
- Cornell political scientist Suzanne Mettler’s research shows that just like cars and houses, policies need periodic upkeep to remain effective. Legislators can maintain policies by reauthorizing them to guarantee funding streams, adjusting them for inflation, and periodically reassessing and reforming them.