Alternatives for Financing Medicaid Expansions in Health Reform
Expanding Medicaid to cover low-income populations has been a fundamental component of leading health reform proposals. The House Leadership Bill would expand Medicaid to 150 percent of the federal poverty level and the Senate Leadership Bill would expand Medicaid to 133 percent of the federal poverty level. In both scenarios the federal government would finance a substantial share of costs for the expansion groups.
This analysis, however, shows that it is possible to distribute increased federal payments in multiple alternative ways that could be less complicated and would avoid perpetuation of inequities that would be associated with providing higher matching rates just for new eligible Medicaid enrollees.