The Impact of Per Capita Caps on Federal and State Medicaid Spending

A medical professional helps patients fill out forms for medical insurance.

The American Health Care Act (AHCA), as proposed, could cut $734 billion in federal and state Medicaid spending between 2019 and 2028.

 

The Issue

Proposed alternatives to the Affordable Care Act (ACA), currently under consideration in Congress, would have a range of potential implications to overall health coverage rates and government spending.

Key Findings

  • Federal spending would fall by $457 billion, or 16 percent, between 2019 and 2028, under the AHCA.

  • States with the largest coverage gains under the ACA would face larger effects from the AHCA than states that did not expand Medicaid.

  • To make up for cuts, low-income expansion states would have to increase their Medicaid spending from 34 to 55 percent under the AHCA.

Conclusion

The per capita cap in the AHCA, as proposed, could cut $734 billion from Medicaid between 2019 and 2028 and would require tradeoffs for states.

About the Urban Institute

The nonprofit Urban Institute is dedicated to elevating the debate on social and economic policy. For nearly five decades, Urban scholars have conducted research and offered evidence-based solutions that improve lives and strengthen communities across a rapidly urbanizing world. Their objective research helps expand opportunities for all, reduce hardship among the most vulnerable, and strengthen the effectiveness of the public sector. Visit the Urban Institute’s Health Policy Center for more information specific to its staff and its recent research.