There is a “real opportunity” to convert Medicaid into a block grant program, Vice President-elect Mike Pence said on Sunday, with the likely result that countless low-income beneficiaries could lose their health insurance or see steep reductions.
“There’s a real opportunity as we repeal and replace Obamacare to do what the president-elect also said on the campaign, which is block granting Medicaid back to the states,” said Pence during an appearance on ABC’s This Week.
Block granting social benefit programs gives states more discretion in how those programs are administered. Instead of managing the program itself or specifying how funds should be allocated, the federal government simply provides each state with a sum of cash to dispense as it sees fit. Usually, that means states have more latitude to limit enrollment or impose on harsh cuts on welfare programs. A 2011 Kaiser Family Foundation report estimated that tens of millions of people could lose their insurance if Republican efforts to block grant Medicaid were successful. Eligibility varies by state, but Medicaid recipients tend to be near or beneath the poverty line.
During the same appearance on This Week, Pence said that President-elect Donald Trump would “keep [his] promises” on Medicare. Trump had previously vowed not to cut either Medicare or Medicaid.
However, Pence stopped short of saying that there would be no changes to Medicare, even when asked directly by This Week host George Stephanopoulos. In the case of both Medicare and Medicaid, the biggest threat from Republicans is not a direct budget cut, but rather structural reforms that cause declines in enrollment and quality of coverage. For Medicaid, that means block granting the program; for Medicare, it means replacing the current, single-payer system with vouchers that recipients will use to buy private health plans.
Nevertheless, it is worth noting that a block grants proposal pushed by Speaker Paul Ryan (R-WI) would cut Medicaid by as much as a third over ten years, so deep spending cuts are very much on the table, at least in Congress.