Chapter 2 focuses on state policy levers to control Medicaid spending. As Medicaid program spending grows in absolute and relative terms and becomes a larger share of state budgets, states have incentives to limit growth in per-person spending and overall Medicaid costs. The federalist structure of Medicaid provides states with many options for the design and administration of their programs.
The chapter describes the range of policy drivers that affect Medicaid spending at the state level, from federal requirements that create a spending floor in every state to areas where states have flexibility in the design and administration of their programs, such as managing enrollment, limiting benefits, determining provider payments, changing delivery systems, and strengthening program integrity. It also describes state requests for additional program changes under demonstration authority that currently are not allowed under federal statute.
From: June 2016 Report to Congress on Medicaid and CHIP