The Impact of Per Capita Caps on Federal and State Medicaid Spending

Research Report

The Impact of Per Capita Caps on Federal and State Medicaid Spending

Abstract

In this paper, we analyze the effect of two per capita cap approaches: that in the AHCA and that in Speaker of the House Paul Ryan’s “Better Way” health care plan, released in June 2016. We estimate the effect of each of these per capita caps on federal and state spending from 2019 to 2028. We estimate that between 2019 and 2028, the Better Way proposal would reduce federal Medicaid spending by $841 billion, or 18.1 percent. The AHCA would reduce federal spending by $457 billion, or 9.8 percent. Assuming the bulk of states that expanded coverage under the ACA dropped eligibility for their expansion populations, we estimate that 8 million enrollees would lose Medicaid coverage, and federal savings would increase to $735 billion between 2019 and 2028.

Research Area: 

Centers

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