Block Grants Pros And Cons Essay

Block grants refer to programs in which the federal government provides large sums of money to state governments in order to pay for various services, such as in the case of this report, health care. Block grants tend to have very little regulation has to how the funds should be spent. Instead, the receivers of the block grants get to decide on how the funds should be allocated. The United States has been using block grants notably since the 1970s under a political ideology known of “New Federalism” (Kodjak, 1). New federalism is essentially the idea that greater political power and autonomy should rest with states, not the federal government. President Ronald Reagan pushed Medicaid block grants in 1981, House Speaker Newt Gingrich in 1995

The first reason that Republicans favor block grants is that it would take away power from the federal government and instead delegate more power to the states (Mahan, 1). When it comes to issues like health care, Republicans argue that states know better about the health issues and needs of its own residents than the federal government (Kodjak, 2). Therefore, it can more effectively allocate resources in order to solve healthcare problems. The specifics of how the block grants would work in regards to who qualifies for medicaid assistance is still a variable that is unknown and worries democrat lawmakers. Republicans also argue that block grants would actually save the US government billions of dollars. States may find and eliminate unnecessary and ineffective programs. They may also use block grants as a means to innovate their own respective healthcare systems. Block grants would also remove the requirements that most Americans carry insurance and that large employers offer health cover, a key gripe Republicans had with the ACA (Mahan, 1). By implementing block grants, it may discourage government dependence and in turn eventually downsize the federal and state governments (Kodjak, 2). For Republicans, this is obviously favorable since smaller government is viewed as better. The private sector would also be stimulated as a result of block grants since the government healthcare

First, state taxpayers may experience rising healthcare costs disproportionate to other states (Mahan, 2). Without tailored federal assistance, health care costs may contribute to an unbalanced state budget that burdens the taxpayer. In order to account for this, states may be forced to eliminate certain programs, therefore, leaving some without coverage. Medicaid currently covers almost 70 million Americans, including one in three children, four in 10 births and 70 percent of nursing home residents (Kodjak, 2). With the implementation of block grants, especially without clear guidance and infrastructure, those currently covered by the Affordable Care Act could very well experience reduction or loss of their health coverage. According to the nonpartisan Congressional Budget Office, recent Republican block grant proposals could cut Medicaid spending by as much as a third over the next decade. The cuts would start small, growing larger over the years (Mahan, 2). Although the reduction of federal spending may seem appealing to some, this in turn could have a ripple effect on the various Medicaid services currently being provided. To put it plainly, under block grants, states could very well find themselves having to cut certain services due to lack of