A major element of the federal legislative proposals to repeal and replace the Affordable Care Act is a change to the financing structure for Medicaid. Understanding the effect this funding change will have on Medicaid programs is a critical priority for states. The State Health and Value Strategies program is working to analyze the financing changes from a state perspective.
The American Health Care Act (AHCA), as passed by the House of Representatives on May 4, 2016, would overhaul federal financing of state Medicaid programs, and for the first time, would cap federal Medicaid funding. As policymakers debate the potential implications of per capita caps, it has been suggested that per capita caps are really no different than Medicaid managed care—a concept with which states are fully familiar and well able to manage. This policy brief tests that hypothesis by examining the similarities and differences between the federal per capita cap and a state’s per capita “cap” in Medicaid managed care spending.
Following the House’s passage of the American Health Care Act (AHCA) and the Senate’s on-going repeal and replace negotiations, it is clear that significant changes to federal Medicaid financing remain in play. Building on past State Network webinars that have reviewed the AHCA Medicaid financing provisions and identified their implications for states, the State Network, in partnership with technical experts from Manatt Health, held a webinar that provided a deep-dive on critical issues that will influence the impact of capped funding on states, including choice of base year, trend rates, and treatment of supplemental payments. The discussion was informed by updated modeling based on the House-passed version of the AHCA.