The Republican plan would convert the federal share of Medicaid spending into a block grant "that gives states the flexibility to tailor their Medicaid programs to the specific needs of their residents." Republicans envision savings of $735 billion by 2022, compared with Obama's budget proposal earlier this year.
Moreover, although flexibility for states might translate into new efficiencies, the cuts in federal funding "would probably require states to reduce payments to providers, curtail eligibility for Medicaid, provide less extensive coverage to beneficiaries, or pay more themselves than would be the case under current law," the CBO says.
A White House outline says Obama's plan will "make Medicaid more flexible, efficient and accountable without resorting to block granting the program" or reducing coverage for seniors in nursing homes. He aims for Medicaid savings of at least $100 billion over 10 years.