Professors Sara Rosenbaum and Timothy Westmoreland have an interesting opinion piece in the New England Journal of Medicine with a curious response to the proposal that federal Medicaid funding should be re-structured as block grants (via the Patient CARE Act, proposed by some Congressional Republicans).
It is a pretty well established Republican proposal. It falls short of NCPA’s proposal to convert federal subsidies for health care into refundable tax credits. Nevertheless, it removes the perverse incentive for states to ramp up Medicaid spending beyond what is necessary to pull down more federal funds. In the current system, a state that spends one more dollar on Medicaid will attract between one and nine more federal dollars. This causes states to spend themselves into penury to recover federal dollars.
Ms. Rosenbaum and Mr. Westmoreland suggest that the same Supreme Court that ruled Obamacare’s expansion of Medicaid unconstitutional would do the same for block grants: