The Downstream Consequences Of Per Capita Spending Caps In Medicaid

Medicaid, the government program that provides health insurance coverage to low-income and disabled Americans, is the largest payer for health care in the United States in terms of enrollees and the second-largest payer (behind only Medicare) in terms of spending. Escalating health care costs, a growing federal budget deficit, and fiscal challenges in many states have led to calls to reform the program to decrease spending growth. Recent federal reform proposals from House and Senate republicans would change the current financing system in which the federal government guarantees a share of total program spending to states to one limiting federal cost exposure by setting a per capita cap on federal payments to a state. A change in the Medicaid program to a per capita cap financing system is included in the House-passed American Health Care Act (AHCA) and in the Senate-proposed Better Care Reconciliation Act of 2017 currently under consideration. With the Congressional Budget Office estimating that the Medicaid proposals in the AHCA will cut federal Medicaid spending by 25 percent by 2026, much attention has been given to the effects of such cuts on decreasing the number of individuals enrolled in Medicaid and increasing state budgets. Much less attention, however, has been given to a related but critical question: How do the reforms affect who enrolls in and gets care under Medicaid? From the lens of economics, we draw an analogy to per capita payments in health insurance mark...
Source: Health Affairs Blog - Category: Health Management Authors: Tags: Costs and Spending Featured Following the ACA Insurance and Coverage Medicaid and CHIP Payment Policy Population Health American Health Care Act per capita spending cap system Source Type: blogs