Block grant funding of public health insurance: the Canadian example | The Incidental Economist

Block grant funding of public health insurance: the Canadian example | The Incidental Economist

Comment by Kip Sullivan:

"Block granting" means the federal government would provide only a set amount to the states and the states would have to make up the difference if Medicaid costs rise. Under Ryan's version, the set amount would be set per person enrolled in Medicaid. Every analysis I've read or heard of says Medicaid spending would decline because states would not tax their residents more to make up for the reduced federal share.

The Canadian blogger says Canada switched to a similar block-granting system several decades ago, but per capita spending did not decline because as federal spending declined provincial spending increased. He says the reason provinces picked up the slack is everyone is covered under Canada's system, while only the poor are covered under the US Medicaid program. Thus, all Canadian voters know they could be hurt by politicians who propose to cut provincial expenditures on health care, but all Americans cannot be hurt by cuts in Medicaid. Only the poor can be hurt by Medicaid cuts.

Kip