Caring for the Disabled Elderly: Who Will Pay?

By Alice M. Rivlin; Joshua M. Wiener et al. | Go to book overview

Chapter Eleven
Block Grants

Frustrated by the restrictions of multiple federal funding programs or worried about the fiscal implications of an increasing elderly population, some observers have proposed consolidating federal long-term care expenditures into a block grant to the states. Such a strategy would clearly place primary responsibility for determining and fulfilling the long-term care needs of the elderly with the states. Thus a long-term care block grant reflects the view that the problems of long-term care are most appropriately addressed by state and local governments, not by national policies and programs.

Advocates of a long-term care block grant contend that it will restrain the rapid growth of federal spending, increase support for home care services, overcome fragmentation of the financing and delivery system, and foster flexibility to adapt to local conditions and individual needs. 1 Opponents fear that a block grant will shift the financial burden of long-term care to the states because federal funds will become increasingly inadequate, forcing service levels to be reduced, eligibility to be tightened, and quality of care to erode. 2 Because of differences in the fiscal capacities and political wills of the states, critics also fear that a block grant will perpetuate inequities in long-term care programs.

Every president since Nixon has proposed block grant funding to consolidate certain health and welfare programs, both to slow the growth in the number of categorical programs, which define in detail how the money should be spent, and to shift funding emphasis to general purpose grants. 3 The Reagan administration accelerated the shift from categorical to block grant funding. The Omnibus Budget Reconciliation Act of 1981 (OBRA) consolidated more than fifty categorical and two existing block grants into nine new block grants. 4

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