Final answer:
Since the 1980s, the U.S. federal government's reimbursement mechanisms have shifted towards block grants and revenue sharing, providing states with more control over fund distribution. There has been a significant increase in health-related federal funding, particularly for Medicaid and CHIP. Social Security and Medicare face challenges due to an aging population and the pay-as-you-go system.
Step-by-step explanation:
Starting with the Reagan administration in the 1980s, the federal government began to favor block grants as a method of providing federal assistance, with the intention of giving states more control over the distribution of funds. This was a shift from the categorical grants of the past. During this time, a portion of federal taxes was also returned to the states to be used at their discretion, known as revenue sharing.
As shown in data over the years, there has been a significant rise in federal grant funding related to healthcare since the 1990s, particularly with the expansion of Medicaid. The cost of federally funded healthcare programs like Medicaid and the Children's Health Insurance Program (CHIP) grew substantially, crossing $320 billion in 2014, reflecting over half of the federal grant expenses.
Major social safety net programs, such as Social Security and Medicare, have faced sustainability challenges due to demographic shifts and the nature of the pay-as-you-go system. With the aging population, specifically the baby boomers, there are fewer workers to support a growing number of beneficiaries, creating a need for reforms.