State Responses to New Flexibility in Medicaid

Teresa A. Coughlin, Stephen Zuckerman

Since 2001, more than half the states have changed their Medicaid programs, through either Medicaid waivers or provisions included in the Deficit Reduction Act of 2005. These changes are in benefit flexibility, cost sharing, enrollment expansions and caps, privatization, and structure of program financing. With a few important exceptions, the changes have been fairly circumscribed. However, states may exercise this new flexibility if, for example, national health care reforms do not occur or an economic downturn creates state fiscal pressures. If that happens, new policies could lead to profound changes in Medicaid and could be carried out relatively easily.

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