Per Capita Caps in Medicaid

One way to slow the rise of federal spending on Medicaid would be to calculate per capita spending and set an allowable annual rate of growth.

Medicaid is one of the largest, most expensive public health insurance programs in the United States. It covered nearly 55 million low-income or disabled people in 2011, and cost $432 billion. Medicaid spending is expected to grow to $795 billion by 2021. Concerns over the program's spending at both the federal and state levels have led some policy-makers to urge reforms. 

One proposal to limit spending includes placing a cap on the amount of federal spending per Medicaid beneficiary, but the proposal is a controversial one. Supporters contend that instituting a system of per capita caps would moderate the growth of federal spending on Medicaid. Critics, on the other hand, say that a per capita cap would only shift the costs to the states, which could ultimately limit many poor Americans' access to care. 

This Health Policy Brief examines the issues surrounding per capita caps in Medicaid and other policy options, and was published online on April 18, 2013 in Health Affairs.

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