WHERE IT MAY REALLY HURT

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The Republican Congress wants to change all that. In place of an open-ended entitlement, the G.O.P. proposes block grants that would essentially give states a lump sum each year to spend for Medicaid's traditional purposes as the states see fit. The G.O.P. would then slow the growth rates of these "Medigrants" from the current forecast of 10% yearly to 5%, with some states coming down to as little as 2% growth. On the positive side, the block grants limit the Federal Government's financial exposure to rising Medicaid costs. And the G.O.P. is not proposing actual cuts, but reductions in the rate of Medicaid's growth. Still, given the outlook for affected Americans, the Medicaid proposal has drawn harsh criticism from many, like Oregon Governor John Kitzhaber, a Democrat and a physician, who calls the withdrawal of guaranteed health coverage a "cynical political move" meant to balance the budget on the backs of people who don't vote Republican. The A.M.A., which earlier endorsed the G.O.P.'s Medicare reforms, went public last week with concerns that the Medicaid safety net is being torn wide open.

It's not just theatrics. To begin with, the number of Americans on Medicaid rolls is expected to grow by 10 million in the next seven years. That's not due to any general population surge but to coverage expansions already on the books. Although it's rarely noted, Medicaid today covers only half the poor, since eligibility is typically linked to other federal benefits, like Aid to Families with Dependent Children, that most needy Americans don't receive. To strengthen the safety net, both parties came together in 1990 and passed a law phasing in coverage for poor children under 18 by early in the next decade. Congress over several years had already expanded access for pregnant women. In addition, the number of disabled people on Medicaid is expected to grow much faster than the overall rolls, as more uninsured Americans become aware of these services and the baby-boom generation ages. This expansion will be accompanied by an increase in the very old. The population age 85 and over, 20% of whom now live in nursing homes, will rise 50% during the 1990s. A patient's annual nursing-home care can run to $35,000; a poor child's overall health-care bill, by contrast, costs Medicaid just $1,200.

TOGETHER THESE EXPANSIONS translate into a 28% increase in the number of people Medicaid is expected to serve seven years hence. That's nearly three times as large as the beneficiary growth predicted for Medicare, which depends simply on the increase in the number of seniors. Yet even with these planned expansions, the country would end the century with an estimated 40 million uninsured citizens, a state of affairs unthinkable in other advanced democracies, where universal coverage is the rule.