“Block grants” are the Republican solution to Medicaid spending, and they are now a key strategy for President Donald Trump’s health care plan. Grant blocking is an old Republican strategy, originally pushed by Ronald Reagan in the 1980s. This tactic may indicate how the Trump administration plans to tackle the ACA.
A block grant is a fixed amount of money given to states by the federal government to be used for specific things, in this case Medicaid.
Currently, the nearly 75 million individuals who qualify for Medicaid are guaranteed coverage. The federal government and the state pay for their services jointly, but the government funding is open-ended and specifies what services the state must cover. In the grant blocking scenario, states would have much more freedom in deciding who qualifies for which services.
Lawmakers suggest that block grants could save the country $1 trillion over the next decade. However, experts are worried it will be at the expense of the elderly and disabled, who comprise the majority of Medicaid recipients.