Noteworthy News

Beware Medicaid Block Grants, Analysis Suggests

When the federal government turns housing, health, and social services programs into block grants, funding for such programs erodes over time, according to a new analysis by the Center on Budget and Policy Priorities.

The study found that

Policymakers advancing these proposals often accompany them… with assurances that the new block grant would get the same overall amount of funding as currently goes to the individual programs that it would replace.  This new analysis of several decades of budget data strongly suggests, however, that even if a new block grant’s funding in its initial year matched the prior funding for the programs merged into the block grant, the initial level likely wouldn’t be sustained.  History shows that when social programs are merged into (or created as) broad block grants, funding typically contracts — often sharply — in subsequent years and decades, with the reductions growing over time.

Of 13 such transitions from appropriation to block grant status in recent years, 11 of the programs shrunk in inflation-adjusted terms, some of them significantly so, with a median decline for the 13 of 26 percent to date.

The analysis also found that

The marked deterioration in block-grant funding over time controverts the common claim by block grant proponents that if funding levels prove inadequate, Congress will step in to provide appropriate additional funding.  The general lack of responsiveness of block-grant funding to changes in need contrasts sharply with the high degree of responsiveness of entitlement programs such as SNAP (formerly known as the Food Stamp Program). 

The study comes at a time when some policy-makers are talking about converting Medicaid into a block grant program. This proposal has been around for years and periodically resurfaces, as it has in the past year.

NAUH has long opposed turning Medicaid into a block grant program.

For a closer look at what happens when the federal government turns a program into a block grant, go here to see the Center on Budget and Policy Priorities’ report “Funding for Housing, Health, and Social Services Block Grants Has Fallen Markedly Over Time.”

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