To Understand How Graham-Cassidy Could Work, Look At This Other Block Grant Program

Sep 25, 2017

Graham-Cassidy, the latest Republican health care bill, would take all the money for Obamacare programs and redistribute it to states through a block grant program. That means states would get to decide how the money gets spent.

“What I want to do is take the money that we're spending under Obamacare and block grant it back to the states, so that we can level out the disparity in funding," Republican Lindsey Graham of South Carolina said on the Senate floor earlier this year. "But even go further and allow people in each state to develop health care systems that meet the needs of that state.”

There are still a lot of questions about how the program would work, particularly in a state like Texas. For one thing, the bill is vague about what kind of health care-related programs states can spend the money on.

Stacey Pogue, an analyst with the left-leaning Center for Public Policy Priorities, worries that could have some bad outcomes.

“We have every reason to believe – especially based on our experience with TANF (the cash assistance program for very poor Texans) – that state budget writers will look to the block grant to fill in and supplant state funding for other programs,” she said.

The Temporary Assistance for Needy Families was made into a block grant program during welfare reform in the 1990s.

Pogue and others say that since that block grant went into place, money from TANF has been used less and less for its actual purpose. That’s especially true here in Texas.

In a paper written in 2013, CPPP wrote:

“In federal fiscal 2011, in Texas, of the total $840 million in state and federal TANF funding, only $104 million went to cash assistance, about 12 percent. As the graph below shows, since welfare reform in 1996, Texas has dramatically cut the number receiving cash assistance. Texas is 46th among the states in the share of TANF funds going to cash assistance.”

According to the CPPP, that money now mostly goes to plugging the state’s budget for child welfare programs and pre-K. 

The number of TANF caseloads has declined since it became a block grant in 1996.
Credit Center for Public Policy Priorities

Pogue said there aren’t assurances that what happened to the TANF block grant program won’t happen under the program proposed under Graham-Cassidy.

“For example, it’s an open question as to whether that block grant can be used to fund higher education, health care-related programs or medical schools; whether it could be used for health care delivered through jails; whether it could be used for mental health or family-planning programs or other health care-related programs that are paid for through state dollars,” Pogue said.

Right now, health care dollars that flow through the Affordable Care Act go to programs that help low- and middle-income Texans get insurance. Under Graham-Cassidy, it would be up to states to set up a system within two years if they want to make that happen.

Texas Sen. Ted Cruz has indicated he won’t vote for the bill as it stands now. Sen. John Cornyn said he plans to vote yes. On Monday, Maine Republican Sen. Susan Collins said she would not support the bill, joining Sens. John McCain and Rand Paul, and likely dooming it.