Concerns about growth in federal Medicaid spending have prompted policymakers to consider alternatives to the current financing structure. Congress is considering replacing the existing financing mechanism with per capita caps, which would establish per enrollee limits on federal payments to states and give states responsibility for financing spending above these fixed amounts.
This issue brief revisits the design considerations first described in MACPAC’s June 2016 report chapter, Alternative Approaches to Federal Medicaid Financing and subsequently discussed by MACPAC at its January, March, and April 2017 public meetings. It also describes the design choices made under the American Health Care Act (AHCA, H.R.1628) as passed in the House of Representatives on May 4, 2017, and the Senate discussion draft, the Better Care Reconciliation Act of 2017, as made public on June 22, 2017.
