Medicaid Block Grants and per Capita Caps

Brief

Medicaid Block Grants and per Capita Caps

The Coronavirus Highlights Risks to States
March 25, 2020

Abstract

The Federal government recently announced a new program allowing states in apply for block grants or per capita caps in exchange for new flexibility to limit enrollment and benefits.  These policies have been proposed in  the past but never enacted. They have the significant problem of placing states at risk for the increased costs from recession related increases in enrollment as well as spikes in spending from unforeseen events such as the coronavirus outbreak or the opioid epidemic. They are usually seen as a way to control Medicaid spending but there is no evidence per capita spending growth has been a problem.

Centers

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