Today, House Budget Chairman Paul Ryan released his 2012 budget proposal--"The Path to Prosperity." Ryan's proposal outlines a path to cut spending significantly. He also takes on entitlement reform. Economists and commentators have already begun to debate the plan--some on the right arguing that his budget does not go far enough and others on the left concerned with the size of his proposed cuts.
One reform in particular could be significant for the commonwealth. Ryan proposes a block grant for Medicaid. The block grant would cap the amount of federal aid states receive, and in turn, states would gain greater flexibility to run their individual Medicaid programs without oversight by the federal government.
For a state like Kentucky, Medicaid budgetary problems are not a secret, as we watched in this year's legislative session. The Bluegrass Institute has argued that increased federal funding will only hurt the state and will not solve our economic crisis.
When states limit federal funding and gain greater control, they have the opportunity to create and manage sustainable programs. Rhode Island has already proven this with its Global Consumer Choice Compact Waiver. The waiver capped spending, gave the state greater flexibility, saved the state over $100 million and even led to a budget surplus in the midst of the recession.
The debate for the 2012 budget is far from over, but a block grant for Kentucky's Medicaid program could make a substantial impact.
Tuesday, April 5, 2011
'The Path to Prosperity' includes block grant for Medicaid
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His summary of the Medicare proposal said, “Health plans that choose to participate in the Medicare exchange must agree to offer insurance to all Medicare beneficiaries, to avoid cherry-picking and ensure that Medicare’s sickest and highest-cost beneficiaries receive coverage.”Under his plan, poorer and sicker people in Medicare in future decades would be more heavily subsidized by the taxpayers than would wealthier and healthier retirees.
Thankfully Ryan's Medicare plan met a lot of opposition and was eventually reconsidered. In the end, he decided to drop it.
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