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Why Should I Care About Entitlement versus Block Grant?

By Gail Glockhoff-Long
GolderCare Solutions
Benefits Advocate

We talked last month about changes ahead in public benefits. There are a couple words to watch for and what they mean to you.

Entitlement – An entitlement program in the United States is defined in Wikipedia as a type of “government program that provides individuals with personal financial benefits (or sometimes special government-provided goods or services) to which an indefinite (but usually rather large) number of potential beneficiaries have a legal right…whenever they meet eligibility conditions that are specified by the standing law that authorizes the program.” Funds are not approved as part of an annual appropriation but increase or decrease depending on the eligible claims. The government has promised to provide the benefit regardless of the debt ceiling or passage of a budget. Social Security is an entitlement. The dedicated funding source for Social Security is the payroll tax trust fund. If that fund is exhausted, payments will still be made but must come from the discretionary spending part of the federal budget.

Block Grants – Block grants are not an entitlement.  With a block grant system, the federal government gives a limited chunk of money to a state, which then oversees and implements programs to distribute the funds within the state. When the chunk of money runs out, the state either makes up the difference or the would-be recipients go without the benefit. Under the block grant system, states are allowed to spend the money with little federal oversight. At the state’s discretion, funds can be diverted from the area of the most need to an area with more political influence.  Meeting the qualification guidelines is no guarantee of receiving the benefit.

Examples – Let’s look at a few examples to help clarify the difference.

• Veteran Aid & Attendance Benefit – this benefit was in the block grant category until 2018. During this timeframe, the published rule said that if you met the service and medical expense requirements and had assets of less than $80,000 – you qualified. But in reality, the asset limit was a wild card depending on your age and who reviewed your file.  Assets as low as $30,000 could disqualify you if the reviewer thought you were old enough that you would die before you ran out of money. That has been changed to an entitlement style where if you meet the qualifications, you are eligible.
• Alternatives for the Older Adults / Milestone – The states receive grant money from the federal government under the Older Americans Act of 1965. That money is then divided between the state’s Area Agencies on Aging (AAA). The AAA’s then fund local agency resources and projects such as nutrition programs, transportation, and caregiver
  support.  Bob and Doris are on limited budget and living at home. They need help with meal prep, housekeeping and bathing to stay in their home. The AAA has those services and may offer meals-on-wheels 5 days a week, 2 hours of cleaning a week, and a bath aid 2 times a week for two months at no charge to see if that is a solution. This allows the family to adjust to needed outside help. The AAA plan works great if you need the help in the first part of the year.  By August the AAA may be out of funding and you are put on the waiting list until the next grant money arrives regardless of how urgently you need the care.
• Medicaid is currently an entitlement program funded by the Federal Government. States administer the program.  Even though states have slight variations, the entitlement principal holds true that IF you meet the state guidelines, you are entitled to the benefit. You may have to jump through lots of hoops to get there – but you are entitled by law to the benefit. You also have the right to a hearing before a judge if you are unfairly denied the benefit. Rules are to be equally administered to all.  The same benefit is there if you apply in January or September.  The funding does not come from a limited pot of money. According to the American Health Care Association, 63 percent of all nursing home residents use Medicaid as their primary payer. If Medicaid used block grant funding, many nursing homes and supportive living facilities would be forced to close because the funding source for their residents would be cut off. Where do those people go?

When Medicare and Medicaid were enacted over 60 years ago, the promise was that health care should be guaranteed, comprehensive, and available to all who needed it. Medicaid is a safety net for people of limited income.

Watch for the term Block Grant sliding in to replace Entitlement. Voice your concerns to your representative. It does not matter how many bells and whistles they put on the block grant Medicaid; it would still mean going back on a promise of guaranteed, comprehensive and available health care for all who need it. You could be the one left out.

GolderCare provides individualized care and benefits advocacy and coaching to assist seniors and their families as they navigate the aging process.  Gail is a Benefits and Insurance Specialist with GolderCare Solutions, helping families navigate the complexities of aging, care, insurance, placement, and public benefits.