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6 things to know on Medicaid block grants

On his first day in office, President Donald Trump signed an executive order to begin dismantling the ACA. It's unclear exactly how he and the Republican Congress will replace the ACA, but one of the key concepts to Speaker Paul Ryan's plan is transforming the Medicaid program into a block grant system.

Kaiser Health News released an FAQ on the Medicaid block program. Here are 20 key points from the article:

1. The federal government would provide states with fixed federal grants for Medicaid spending.

2. The size of each grant would depend on the state and federal Medicaid funding for that state and would grow slightly each year to accommodate inflation, but likely won't reach the medical inflation rate.

3. States would have the freedom to decide how to spend their grant money, giving them the power to decide who qualifies for which services and states could cap enrollment.

4. The block grant is different from the "per capita cap" which gives states a fixed amount based on the number of people in the program; but the block grant isn't based on the number of people enrolled, therefore states with higher enrollment wouldn't always receive more money during an economic downturn.

5. The Congressional Budget Office estimates the block grant proposals could cut Medicaid spending by "as much as a third" in the next 10 years; Medicaid accounted for 17 percent of the healthcare expenditures in the United States in 2015.

6. If Medicaid spending decreases and there are fewer people covered, hospitals and clinics treating a high number of Medicaid beneficiaries "may have to rethink their budgets, what services they can provide and how many people they can employ," according to the report.

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