Medicaid Blueprint Calls for Per Person Caps

Last week, the House Energy and Commerce Committee Chairman Fred Upton (R-MI) and Senate Finance Committee Ranking Member Orrin Hatch (R-UT) released the “Making Medicaid Work” blueprint to modernize the Medicaid program. A key provision included in the plan is per capita caps which would limit the amount of federal dollars spent on each beneficiary.

The plan states that health care needs of the aged, people who are blind and people with disabilities “should be customized and targeted appropriately to improve care and reduce costs.” The plan calls for placing four separate capped spending amounts on each of four major groups: the aged, people who are blind and people with disabilities, children, and adults. The number of individuals in a group would be multiplied by the cap amount for that group resulting in the amount of federal dollars the state would receive for each person in that group. The cap for each group would be based on what a state currently spends on that group. Annual increases to the per capita caps would be based on “a realistic exogenous and appropriate growth factor for each state.” States that currently spend more on each person would be less than increases to states that currently spend less on each person until spending were “normalized” across states. If state spending exceeded the caps, there would be no additional federal dollars.

The plan proposes creating shared-savings and risk corridor models to encourage states to provide healthcare services at lower cost. States that achieved savings could use them “to determine how to protect vulnerable populations such as the disabled from unpredictable spending above the state’s cap.” States that exceeded their spending caps could deny Medicaid to “high income recipients.”

The 20-page blueprint includes two broad goals and 11 sub goals. There is little detail about how the proposal would actually work. The plan’s authors state that Congress and the governors “will enact comprehensive and sustainable Medicaid reform.” The Arc will monitor details of the blueprint as they become available.

%d bloggers like this: