Medicaid Block Grants and per Capita Caps: The Coronavirus Highlights Risks to States

This report examines the effect of a recently announced federal program allowing states to apply for Medicaid block grants or per capita caps in exchange for new flexibility to limit enrollment and benefits.

These policies have the significant problem of placing states at risk for the increased costs from recession-related increases in enrollment as well as spikes in spending from unforeseen events such as the coronavirus outbreak or the opioid epidemic. They are usually seen as a way to control Medicaid spending, but there is no evidence per capita spending growth has been a problem.