Newt Gingrich — who introduced his own block grant proposal in 1995 — endorsed the Republican effort to reduce federal Medicaid expenditures by transferring more of the responsibility for the program to the states, telling Rep. Michael Burgess’ (R-TX) Congressional Health Care Caucus, “there is zero doubt in my mind that the Lyndon Johnson experiment of a nationally managed bureaucracy for the poor is a total failure. ” During a question an answer session following the speech, Gingrich was asked by CNN reporter Peter Hamby how he would respond to criticism that block grants would lead states to “throw people off the books.” The former speaker conceded that some would, saying “I think different states will do different things”:
GINGRICH: Well, I think different states would have different solutions and different states will do different things. Different states will organize care in different ways. But I find it fascinating that there are people in Washington DC, who believe that their depth of care is greater than the people in those states and they somehow should trust a bureaucrat in Washington who has never been in Idaho or North Dakota or Arizona to be more concerned about the health of people in those states than a company who lives down the street, is part of the process, and actually sees it on a daily basis. And I think different states will do different things.
As the Congressional Budget Office has predicted in analyzing a block-grant proposal offered by Rep. Paul Ryan (R-WI), some of those “different things” include providing “less extensive coverage” to their beneficiaries. In fact, an analysis of Gingrich’s 1995 block grant proposal concluded that 48 states would have experienced a reduction in federal dollars, while federal Medicaid spending would have fallen by 15 percent in FY 2002 — less than Gingrich predicted at the time. But, if this loss of federal funding “had been absorbed through eligibility restrictions, then more than 6 million people would have lost Medicaid coverage in 2002,” the study found. It added that “the states could have responded to these reductions in federal funding by increasing their own spending in order to maintain services for their Medicaid enrollees. However, the amount required to do so would have been equivalent to a 40 percent increase in the $40 billion shortfall that was estimated for 2002.”
Gingrich’s suggestion that “Washington bureaucrats” believe that they know more about a state’s health care program than local residents is also misleading, since Medicaid is a jointly funded program by the states and the federal government. In today’s Concord Monitor, Jim Roche, who is also the president of New Hampshire’s Business and Industry Association, and is “part of the process” wrote an editorial arguing that reducing spending on Medicaid would actually shift costs to businesses.