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approach to Medicaid and SCHIP could pro-
The most crucial element of the block-
duce similar results. When the 1996 welfare
grant approach is that states could not
reform law eliminated Medicaid benefits for
obtain additional federal funding by expand-
noncitizen immigrants, opponents predicted
ing their programs. That feature would dis-
that coverage levels among noncitizen immi-
courage states from expanding government
grants would drop. Instead, coverage levels
aid to individuals who could obtain health
increased because more noncitizen immi-
insurance on their own. Block grants would
grants obtained private health insurance.49
allow each state to preserve its Medicaid and
SCHIP programs just as they exist today.
That experience supplies evidence that pri-
States that wish to expand their programs
vate health insurance coverage expands in
could continue to do so. However, states
response to a reduction in government cover-
would have to pay for such expansions them-
age--sometimes enough to overwhelm the
selves, rather than have taxpayers in other
reduction in government coverage.
states shoulder the burden. That would
Medicaid block grants were part of the
encourage each state to focus its programs
original 1996 welfare reform law until they
on the truly needy. Over time, states would
were dropped at the insistence of President
learn from each other's experiments at pro-
Clinton. Congress should revive the idea to
viding efficient care to those who truly need
rededicate government health care spending
to those who truly need assistance.
It makes little sense for residents of the 50
states to send their money to Washington, DC,
Affordable Coverage via
only to have Washington send that money
Competitive Federalism
back to the states. Moreover, it is arguably
unconstitutional. The U.S. Constitution does
not grant Congress the power to provide
Another reason states have been eager to
health care to the needy. Under the Tenth
expand their Medicaid programs has been
Amendment, such "powers not delegated to
the rising cost of private health insurance.
the United States by the Constitution . . . are
State health insurance regulations have been
reserved to the states."47 Converting federal
a driving force behind that trend.
The average state requires consumers to
Medicaid and SCHIP funding to block grants
purchase 38 separate types of coverage.50
would do more than simply limit the growth of
government health care programs. Block
Forty-five states require all consumers, even
Block grants
grants would take a step toward a more sound
teetotalers, to purchase coverage for alco-
would take a step
and constitutional means of providing health
holism treatment. Thirty states require con-
sumers to pay for contraceptive coverage and
care for the needy, where the money never pass-
toward a
13 states require consumers to pay for cover-
es through Congress's hands.
more sound and
Opponents will predict that block grants
age of in-vitro fertilization--even though
would reduce access to care and increase the
many consumers, such as some Catholics,
number of uninsured. Opponents of welfare
find those services morally objectionable.
means of
reform made similar predictions, which
Those coverage mandates increase the cost of
providing health
turned out to be inaccurate. When Congress
private health insurance by as much as 15 per-
cent.51 An estimated 25 percent of the unin-
pared back cash assistance, welfare caseloads
care for the needy,
plummeted and poverty decreased--often
sured lack coverage due to the cost of manda-
where the money
tory coverage laws.52 Underwriting restrictions
dramatically--in every category. The poverty
never passes
rate remains lower today than at any point in
such as "community rating" laws, a type of
the 17 years leading up to 1996.48 Many who
price control, further increase the cost of pri-
vate health insurance for many low-income
opposed welfare reform have since admitted
families, and likewise increase the number of
that it accomplished a large measure of good.
uninsured.53 Such regulations price many low-
There are indications that a block-grant