1. Medicaid Per Capita Caps What they are and what they aren’t
Dee Mahan
Director, Medicaid Initiatives
FamiliesUSA.org

2. Federal push to fundamentally change Medicaid….
……and the ability of states to care for their residents.
Since 1965:
Guaranteed federal match; guaranteed coverage, benefits
Block grant:
Fixed amount per state
Per capita cap:
Fixed amount per enrollee
Per capita caps are being talked about in the context of radical changes to Medicaid financing
FamiliesUSA.org

3. What per capita caps are and aren’t
They are
They are not
A way to address enrollment growth concerns
A more obscure way to frame cutting Medicaid
A way to reduce federal funding
A way to shift risks and costs to states
A compromise solution
Providing the same federal guarantee to states
Offering states financial protection
Shielding states from large federal funding cuts
FamiliesUSA.org

4. A primary goal is to reduce federal Medicaid spending
A per capita cap structure can’t protect states from large federal funding cuts
Past House Republican budget plans:
Proposed: 33.4% reduction in federal spending
Proposed: 38% reduction in federal support
Proposed: 25% reduction in federal Medicaid spending
, on top of cuts from repealing Medicaid expansion.
FamiliesUSA.org

5. The details for setting the cap matter……
What’s the baseline?
What’s the adjustment formula?
What about the expansion?
How are groups determined?
What about the out years?
Adjustments for innovations?
Are there triggers for emergency adjustments?
FamiliesUSA.org

6. Paul Ryan’s “A Better Way” proposal
Baseline: 2019 start, based on 2016 cost
Adjustment formula: General inflation
Expansion funding: Phased out
Groups: Children, seniors, adults, blind/disabled
Out years: Demographic changes and inflation adjustment make shortfalls grow
Innovation adjustments: “This reform will promote good behavior and innovation,” A Better Way
Emergency triggers: Not mentioned
FamiliesUSA.org

7. Set funding tends to shrink
Set funding for per capita caps would be likely to shrink just like block grant funding
FamiliesUSA.org

8. And Medicaid can become a piggy bank
Medicaid capped payments can be cut to fund competing federal priorities
Tax code rewrite
Infrastructure projects
A wall
Deficit reduction
FamiliesUSA.org

9. What states might want & what they might get
Flexibility they might want
Flexibility they will have to use
Work requirements
Cut required benefits
Time limits on eligibility
More cost sharing
Disenrollment and lock-outs
Less reporting
Easy to get waivers
Cut provider rates
Cut enrollees
Cut benefits
Cut high-cost care
FamiliesUSA.org

10. States are not managed care plans squeezed
“At a time when roughly two-thirds of beneficiaries in the program receive their Medicaid benefits through …managed care…transitioning federal financing to what is effectively a per-member-per-month amount is reasonable and responsible,” Paul Ryan, House Republican Health Plan
Except……..
There would be no contract term on rates
States could not renegotiate bad rates
States won’t want to carve out unprofitable areas
States cannot pull out of the market if there’s a shortfall
FamiliesUSA.org

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