What If Chairman Ryan’s Medicaid Block Grant Were Already in Effect?

House Budget Committee Chairman Paul Ryan’s proposal to block-grant Medicaid would cut federal funding by one-third by 2022 and even more after that, we recently explained.  To help show how states would likely fare under the proposal over time, we compared how much federal funding they would have received under the block grant if it had been in effect for fiscal years 2001-2010 to what they actually received (excluding the temporary funding increases that the White House and Congress provided during the last two recessions).

We found that the Ryan block grant — which the House passed as part of Chairman Ryan’s overall budget — would have cut federal Medicaid funds to most states by more than 35 percent by 2010 and to several of them by more than 50 percent.

Every state would have received substantially less from the federal government than it actually received, but some states would have received much, much less.

• States would have received $555 billion — or 31 percent — less over the 2001-2010 period.
• In 2010 alone, the cuts in federal funding would have totaled about $81 billion, or 37 percent (see table).

To cope with cuts of this size, states would have to boost their own funding substantially or, more likely, sharply scale back their Medicaid programs by tightening eligibility, shrinking benefits, and cutting reimbursement rates to providers.

Such changes would add millions to the number of uninsured Americans.  Last year, when Chairman Ryan included a similar Medicaid block-grant proposal in his budget, the Urban Institute estimated that it would prompt states to drop between 14 million and 27 million people from Medicaid by 2021 — in addition to the 17 million people who would no longer gain coverage because of the Ryan budget’s repeal of the health reform law’s Medicaid expansion.