Senior Research Analyst
In proposing to convert much of Medicaid into two block grants, Senate Budget Committee Chairman Mike Enzi’s budget plan claims the Medicaid block grants would follow the successful Children’s Health Insurance Program (CHIP) model. As we’ve explained, however, Medicaid under block grants would operate far differently than CHIP and would lead to damaging cuts to states, beneficiaries, and health care providers.
CHIP is funded through a block grant structure, yet it’s helped reduce the share of children without health coverage to a historic low. That’s because Congress has taken extraordinary steps to ensure that states have had adequate federal funding to sustain (and expand) their CHIP programs, allowing them to overcome CHIP’s otherwise flawed capped funding structure. In contrast, Medicaid block grants like those proposed by Chairman Enzi are explicitly designed to reduce federal funding well below current levels (and thus below states’ funding needs) in order to generate large savings.
Here are some of the key findings from our earlier analysis:
CHIP has overcome the serious shortcomings of its financing structure because it differs substantially from typical block grants. Under Chairman Enzi’s plan, the Medicaid block grants would not mirror CHIP’s success but instead likely result in states significantly cutting eligibility, benefits, and payments to health care providers. Substantial numbers of low-income Medicaid beneficiaries would end up uninsured or underinsured.