The House Republican Plan (“A Better Way”) released on June 22, 2016, includes a proposal to convert federal Medicaid financing from an open-ended entitlement to a per capita allotment or a block grant (based on a state choice). This proposal is part of a larger package designed to replace the Affordable Care Act (ACA) and reduce federal spending for health care. Often tied to deficit reduction, proposals to convert Medicaid’s financing structure to a per capita cap or block grant have been proposed before. Such changes represent a fundamental change in the financing structure of the program with major implications for beneficiaries, providers, states and localities. Key things to understand about a per capita cap include the following: how a per capita cap works, key design challenges, and implications of a per capita cap.
Featured Medicaid’s Future Resources
State-by-State Estimates of Reductions in Federal Medicaid Funding Under Repeal of the ACA Medicaid Expansion
Congressional debate around the Affordable Care Act (ACA) has recently included a proposal to repeal the ACA, including the provision allowing states to extend Medicaid to childless adults up to 138% FPL and providing enhanced federal funds for the Medicaid expansion. This brief provides estimates of changes in federal Medicaid funds and Medicaid coverage for adults covered through the ACA expansion if the expansion is eliminated starting in 2020. A repeal of the Medicaid expansion would have significant coverage and financing implications for the 31 states and the District of Columbia that have implemented the expansion.
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Related Medicaid’s Future Resources
- Using Medicaid to Wrap Around Private Insurance: Key Questions to Consider
- Factors Affecting States’ Ability to Respond to Federal Medicaid Cuts and Caps: Which States Are Most At Risk?
- Medicaid and Work Requirements
- Data Note: 10 Charts About Public Opinion on Medicaid
- Data Note: Variation in Per Enrollee Medicaid Spending Across States
- What’s at Stake with ACA Repeal?
- Compare Proposals to Replace The Affordable Care Act
- Strategies to Reduce Medicaid Spending: Findings from a Literature Review
- Medicaid Restructuring and Children with Special Health Care Needs
- Medicaid’s Role in Nursing Home Care
- Medicaid’s Role in Addressing the Opioid Epidemic
- Key Issues in Children’s Health Coverage
- What Could a Medicaid Per Capita Cap Mean for Low-Income People on Medicare?
- Medicaid’s Role: What’s at Stake Under a Block Grant or Per Capita Cap?
- Section 1115 Medicaid Demonstration Waivers: A Look at the Current Landscape of Approved and Pending Waivers
- Section 1115 Medicaid Expansion Waivers: A Look at Key Themes and State Specific Waiver Provisions
- Current Flexibility in Medicaid: An Overview of Federal Standards and State Options
- Medicaid State Fact Sheets
- Medicaid Pocket Primer
- Medicaid Financing: The Basics
Under a per capita cap, per enrollee spending would be capped, but the total amount of federal dollars to states could vary with enrollment changes and states would not be able to impose enrollment caps. Faced with restrictions in federal financing, states would have to make hard choices. This brief outlines the key measures states could use to manage their budgets and the associated challenges under a per capita cap: raise taxes or make other cuts, reduce benefits, limit coverage of high cost enrollees, reduce rates or implement delivery system reforms, and promote personal responsibility. Each option has challenges that are identified in the brief.
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The Medicaid program is jointly funded by states and the federal government. There has been renewed interest in how Medicaid is financed in light of the additional federal financing for the Medicaid expansion under the Affordable Care Act (ACA) as well as ongoing budget discussions at the federal level. This brief reviews how the Medicaid program is financed as well as the implications for budgets, responsiveness to state policy choices and need, the links between Medicaid spending and state economies.
This timeline of key developments tracks the evolution of Medicaid and its role in America’s health care system.
This analysis of the House Budget Plan that was passed in 2012 finds that repealing the Affordable Care Act (ACA) and converting Medicaid to a block grant would trigger significant decreases in federal Medicaid spending and could result in substantial reductions in enrollment and payments to providers compared to current…
This issue brief examines the broad implications of converting Medicaid to block grant financing, one of several ideas that have been put forth to help reduce the federal deficit. The paper, which does not analyze any specific proposal, notes that switching to block grant financing would fundamentally alter the Medicaid…
Financing Health Coverage: The State Children’s Health Insurance Program Experience Enactment of SCHIP sought a balance between increasing funds available for coverage and limiting total federal outlays. While SCHIP has had widespread support and success in helping to provide coverage for uninsured children, its capped financing system has also…
– Issue Brief State and federal budget pressures, rising health care costs, and new waiver initiatives have promoted debate over restructuring Medicaid at the federal and state level. Questions about how Medicaid is financed are central to this debate. This paper compares the current Medicaid financing system to a…
The Impact of the “Medigrant” Plan on the Federal Payments to States The analysis examines the conference agreement plan for the redistribution of federal funds under a block grant for the Medicaid program. It also discusses the implications of the reductions in federal spending for beneficiary coverage. Report: The…
Medicaid, jointly financed by state and federal governments, is made up of over 50 separate programs with disparate populations covered and services offered. In an effort to better understand the implications of federal policy changes for the financing structure of Medicaid, the Kaiser Commission on the Future of Medicaid…