South Carolina Governor Nikki Haley (R) literally begged Congress to block grant Medicaid at yesterday’s town hall hosted by CBS. Haley argued that if the federal government allocated a pre-defined amount of dollars for Medicaid, rather than providing a matching fund that keeps up with health care costs, South Carolina would have greater flexibility to manage its program:
HALEY: We have to lead. And so, what I would beg of both the Congress and the Senate, which I think everybody should agree on, is give us flexibility. Quit mandating any spending down. Medicaid alone is a quarter of South Carolina’s budget. Give us the ability to decide what the health care needs are of our citizens…And block granting in Medicaid is huge for us.
Unless South Carolina has developed some new innovative ways of delivering health services below cost, the “flexibility” Haley’s seeking is really permission to spend less on a safety net health care program. Under a block grant structure, South Carolina would receive an annual federal appropriation that would be less than current projected growth of the program, and the state would have to to make up the difference by increasing spending or (more realistically) capping enrollment, cutting eligibility, limiting mandatory benefits, and lowering provider reimbursements.
In fact, according to a recent report from the Kaiser Family Foundation, South Carolina could cut its enrollment by up to 53 percent under the block grant initiative offered by Rep. Paul Ryan (R-WI).