GOP Medicaid Plan: No States Are Winners, but Lots Are Fiscal Losers

May 16, 2017

How will the block grant system proposed by Republicans affect Medicaid? A new study finds the impact would vary wildly from state to state, with some being forced to increase their annual spending on Medicaid by very large margins if they offer the same level of services that they did before the cut.

A key element of the Republican plan to repeal and replace the Affordable Care Act is the devolution of responsibility for Medicaid to the states by turning the program into a per capita block grant, which limits the federal contribution to the entitlement program, which provides health insurance to the poor, elderly, and children.

While it’s impossible to know exactly how such a program would play out, three health care scholars at the Brookings Institution tried to simulate what a similar program would have looked like if it had been implemented in years past, for which full sets of data on Medicaid expenditures are available. The AHCA version of the plan would take effect in Fiscal 2020 and would cap spending based on each state’s per capita Medicaid patient costs in 2016. In the years after 2020, the cap would be raised in line with the Consumer Price Index for Medical Care and would take into consideration the number of people that the program covers in each state who have conditions that require unusual levels of care.

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