As federal health reform legislation has stalled, health policy attention turns to the states, which have many tools to reform their health care systems. While 1115 waivers rightly get a lot of attention, because of their ability to reshape state Medicaid programs, the Affordable Care Act’s Section 1332 waivers continue to be a promising avenue for states.
Capping Federal Medicaid Funding: Key Financing Issues for States
Cindy Mann, Deborah Bachrach, Patti Boozang, Jocelyn Guyer, and Anne Karl, Manatt Health
Proposals for the incoming Congress and presidential administration to repeal the Affordable Care Act (ACA) have also included a call for a fundamental overhaul of the Medicaid program by imposing caps on federal funding to states. Such capped funding would replace the central feature of Medicaid’s financing structure, the federal government’s legal obligation to share all allowable state Medicaid costs. While the design of various proposals to cap federal Medicaid funding may differ in several ways, they all aim to allow the federal government to achieve budget certainty and reduce federal Medicaid spending. This issue brief, developed by Manatt Health, reviews past proposals and explores financing issues that arise in the design of capped federal funding.