The State Impact of Capping Federal Funding for Medicaid

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<p>One of the sweeping changes in both the House-passed American Health Care Act and the Senate’s draft Affordable Care Act repeal bill is the end of the federal government’s commitment to share all Medicaid costs with states. In a new analysis on <em>To the Point,</em> Manatt, Phelps & Phillips’s Cindy Mann and colleagues explain that the bills replace this commitment with a cap on federal Medicaid spending that would significantly reduce state funding.</p><p>The House bill adjusts spending for inflation, based on the medical price component of the consumer price index (CPI), rather than the costs of health care. And the Senate is considering adopting the overall CPI, the index for general price inflation, after 2020. The authors have modeled the state-by-state impact of the House bill’s per capita cap under various medical and overall CPI growth rates.</p>
<p>Lowering Medicaid spending in this way, the authors say, shifts all financial risk to states and leaves little room for future health care needs, such as new cancer therapies, sharp increases in drug costs, or an epidemic like the current opioid crisis. </p> Read the post