Brief Block Grants and per Capita Caps
The Problem of Funding Disparities among States
John Holahan, Matthew Buettgens
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Block grants and per capita caps have been proposed as mechanisms for controlling Medicaid expenditures. Block grants would allocate money to states based on current overall spending levels in each state, and per capita caps would allocate funds based on current spending per enrollee. In this brief we show that federal spending (adjusted for the size of each state’s low income population) varies across states by more than 5 to 1 and spending per enrollee varies on the order of 2 to 1. In general, high income states will get larger block grants and higher spending per enrollee caps because they spend more today. These disparities would be locked in under these kinds of proposals.

Research Areas Health and health care
Tags Federal health care reform Medicaid and the Children’s Health Insurance Program  Health insurance
Policy Centers Health Policy Center