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GAO Report Examines Per Capita Caps in Medicaid

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GAO Report Examines Per Capita Caps in Medicaid

September 12, 2016
In a report released on September 9, the Government Accountability Office (GAO) examined key policy and data considerations for designing a per capita cap on federal Medicaid funding. A per capita cap would provide a fixed dollar amount per Medicaid beneficiary, rather than the current structure which uses federal matching dollars based on state expenditures.Under a per capita cap system, states would receive a fixed dollar amount from the federal government regardless of how much they spend on their Medicaid program. 
 
GAO conducted the study at the request of Senator Orrin Hatch (R-UT) and Representative Fred Upton (R-MI). The lawmakers have advocated for restructuring the Medicaid system by implementing per capita caps, block grants, or a combination of the two. Critics of these approaches note that they would decrease the federal share of Medicaid, requiring states to make up the difference, or scale back on their programs. 
 
The report listed several key policy considerations, including coverage and flexibility, allocation of funds accross states and over time, accountability, and broader effects to health care. The GAO noted that while CMS data could be useful in developing estimates of per enrollee Medicaid expenditures, the data has limitations due to its complexity, making it challenging to track on an individual basis. 
 
The full report, including a one-page highlights page, is available here