Federal Budget Would Win, But the Most Vulnerable and Poor Would Lose, Under Capped Medicaid Funding Scenarios
The Trump administration's intent to reform
None of three "capped" financing systems -- block grants, capped allotments and per capita caps -- discussed in previous health proposals guarantees benefits for those who qualify for the low-income health program. All of them shrink real funding over time because the proposed growth formulas set the growth to a lower rate than what would be expected under current law. In contrast, the current
As a result of capping, states would have to choose whether to bear an increasingly larger share of
"These are great plans for federal accountants. It's a terrible plan for everyone else," said center Director
Disabled and elderly account for a disproportionately high level of care
The
Benefits vary widely by population group, with the disabled and those 65 years and older making up about 25 percent of enrollees in 2011, but accounting for 64 percent of
"It obviously costs more to provide care for certain populations, such as the severely disabled," said
How three capped funding systems would change benefits
Each proposed capped financing system would change -- and decrease --
Block grant: Changes Medicaid to a fixed-grant program that stays constant over time, regardless of whether an economic downturn leaves more people uninsured or a population spike increases demand for enrollment. The report's authors say funding for block grant programs are often targeted during federal budget cuts.
In
Capped allotment: Requires the state to spend money in order to receive matching federal funds, up to a limit. A state that spends less than anticipated would have its federal match reduced. Funding under this system is expected to be lower than current funding.
Per capita caps: Limits how much can be spent on health care per enrollee. The state would be responsible for any amount that exceeds the limit, which would be a problem with sicker, older patients, who require more care, or in the event of a natural or man-made disaster. Geographic variation in health costs could be a problem for many states, if the federal government uses a uniform cost measure. Per capita caps were the proposed funding system in the American Health Care Act.
In
According to the report, proponents of capped funding systems say those systems will encourage states to become more efficient and innovative and to find ways to provide health services for less money. However, the authors note that state
"Under these caps, many
Read the policy brief (http://healthpolicy.ucla.edu/publications/search/pages/detail.aspx?PubID=1618), "A 'cap' on
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