Which States Could be Hit Hardest by Reductions in Medicaid Spending?

June 13, 2017


Information just released from the Kaiser Family Foundation:

In 2017, Congress has been debating legislation, the American Health Care Act (AHCA), which would end the enhanced federal matching funds for the Affordable Care Act (ACA) Medicaid expansion and fundamentally alter the structure and financing of the Medicaid program.Specifically, it would cap and significantly reduce the amount of federal funding provided to states for Medicaid through a per capita cap or block grant. The Congressional Budget Office estimated that the AHCA as passed by the House would reduce federal Medicaid spending by $834 billion from 2017-2026 and reduce enrollment by 14 million by 2026 compared to projections in current law. The proposed Trump Administration budget for FY 2018 would have deeper Medicaid reductions.

The cap on federal funding would lock-in current state spending patterns that reflect historic Medicaid policy choices. Today, Medicaid is a state and federal partnership where the federal government sets core requirements for Medicaid and states administer the program; financing for Medicaid is shared by states and the federal government with no caps. Due to flexibility in the current law, states historically have made different Medicaid decisions related to coverage, scope of benefits, reimbursement rates and delivery system models. In response to a funding cap, each state would need to make budget decisions to fill in gaps in federal funding (through taxes or other budget cuts) or to restrict Medicaid programs.

All states could face challenges responding to federal Medicaid cuts and caps to varying degrees, but states with certain characteristics are more at risk. This analysis examines 30 factors in five groups that could be high risk factors affecting states’ ability to respond to federal Medicaid cuts and caps and identifies states ranked in the top five for each factor as high risk (ES-1). This analysis shows that more than 6 in 10 states rank in the top five for multiple risk factors. Eleven states rank in the top five for five or more risk factors (Alabama, Arizona, Florida, Georgia, Kentucky, Louisiana, Mississippi, New Mexico, South Carolina, Texas, and West Virginia).


The full article and details can be found at here

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