The fiscal impact of the Trump Administration’s Medicaid block grant initiative
- Collection:
- Health Policy and Services Research
- Series Title(s):
- Issue brief (Commonwealth Fund)
- Author(s):
- Mann, Cindy, author Guyer, Jocelyn, author Striar, Adam, author Stone, Devin, author
- Contributor(s):
- Commonwealth Fund, issuing body.
- Publication:
- [New York, N.Y.] : The Commonwealth Fund, March 2020
- Language(s):
- English
- Format:
- Text
- Subject(s):
- Medicaid -- economics Capitation Fee Cost Control United States
- Genre(s):
- Technical Report
- Abstract:
- ISSUE. The Trump administration recently invited states to apply for the new Healthy Adult Opportunity Medicaid demonstration initiative, which lets states opt into a block grant funding model in exchange for fewer federal rules. By capping federal funding, the initiative exposes the Medicaid program to unprecedented financial risk. GOALS. To estimate the financial impact of the new block grant model. METHODS. Using historical data and projections of cost and enrollment growth, we estimate Medicaid expenditures under current law on a state-by-state basis and compare these to funding available under a block grant. We also demonstrate the sensitivity of our estimates to fluctuations in costs and enrollment. KEY FINDINGS. States that take up the block grant would see substantial reductions in Medicaid funding. Under our baseline scenario, the median state would face a reduction of 5.7 percent in fiscal year (FY) 2021; 14.6 percent in FY 2025; and 10.5 percent over the 2021–2025 period. The five-year median reduction in funding would be significantly larger if per enrollee spending growth is 1 percentage point above projections (13.9%), if enrollment grows at recent historical levels rather than projections (19.7%), or if a state reduces expenditures to capture "shared savings" (27.6%). Under all scenarios, the vast majority of Medicaid savings resulting from the funding reductions accrue to the federal government.
- Copyright:
- Reproduced with permission of the copyright holder. Further use of the material is subject to CC BY license. (More information)
- Extent:
- 1 online resource (1 PDF file (21 pages))
- Illustrations:
- Illustrations
- NLM Unique ID:
- 101769555 (See catalog record)
- Permanent Link:
- http://resource.nlm.nih.gov/101769555