Governors eye block grants as way to cut Medicaid costs

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Mississippi Gov. Haley Barbour (R)
Mississippi Gov. Haley Barbour (R)
House Republicans would like to see Medicaid outlays trimmed dramatically. And they are hardly alone.

As states struggle to meet mounting fiscal obligations, governors are desperate for relief. In 2010, Medicaid consumed nearly 22% of state budgets, according the National Association of State Budget Officers. Medicaid enrollment is expected to surge in 2014 due to the healthcare reform law.

Provider groups say they understand such concerns. But professional caregivers don't want to see Medicaid funding constrained.

What all sides seem to agree on is that block grants are the most likely change to happen, if change does occur. This tool would give states greater flexibility in managing Medicaid services and outlays. But it also would certainly mean payment reductions for nursing home operators.

While both Democrats and Republicans have sought to save money by encouraging, for example, generic drug prescriptions, home care for the elderly and managed care, GOP governors also have challenged the provision in the new healthcare reform law that generally prevents states from tightening Medicaid eligibility requirements.
Block grants are a “one-size-fits-all device” that create inequity across states, said one fereral agency director.
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