The money is confiscated first from the states by Washington, and then redistributed back to the states with Washington mandates and strings attached.
Because of the expansion of Medicaid under Obamacare there is no possibility of cold turkey. It will never pass.
The money going back to the states is not permanent. It is almost impossible to clawback an entitlement. This bill starts the process and has a great chance of getting there in 5 years or so.