House Speaker Paul Ryan (R-WI) has added a “block grant” option to the plan for funding the Medicaid program that is part of legislation crafted by House Republicans to replace Obamacare. Whereas the version of the American Health Care Act (AHCA) approved by three House committees would change the federal method of funding Medicaid to a per-capita cap that would increase with inflation, the plan to be offered for a vote on the House floor would give states the option of instead receiving federal funding in the form of a lump-sum block grant keyed to the number of Medicaid recipients. This would would appear to give states choosing the block grant option almost unlimited flexibility in determining who is eligible for Medicaid and what services they will receive. “States choosing the block grant are required to submit a report that identifies the conditions for eligibility under the block grant which are in lieu of eligibility in current law, except in the case of certain low-income pregnant women and children in poverty,” according to a “Manager’s Amendment” outlining this and other changes to the bill. The actual funding under either the per capita or block grant plan would start in 2020, but both would use 2016 as a base year, adjusted each year by the medical component of CPI (CPI-M) calculations, which the Congressional Budget Office projected would lead to shortfalls in federal funding compared to states’ needs. To win over more moderate House Republicans, the Manager’s Amendment increases the growth rate of capped federal payments to the states for elderly and disabled beneficiaries.
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