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GAO Identifies Key Considerations for Medicaid Per Capita Caps

The Government Accountability Office (GAO) has identified key policy and data factors policymakers should consider if they opt to reform the Medicaid program by implementing a per-capita cap.

A per-capita cap would allow the federal government to limit Medicaid spending by allocating a specific amount of funding to states for the Medicaid program, based on the number of Medicaid enrollees in the state.

To determine the funding rate per Medicaid enrollee, the Centers for Medicare & Medicaid Services (CMS) would have to develop an estimate of federal Medicaid spending per enrollee. In a new report, GAO identified the limitations to the available data that would be used to develop these estimates.

To identify an accurate expenditure rate, the data collected by CMS would require complex adjustments to link all federal Medicaid expenditures to enrollees. Additionally, data from nationally representative population surveys would need to be combined with information on expenditures for health care services to accurately determine the appropriate per-enrollee federal spending rate.

The report also identifies these key policy-related factors that policymakers should consider:

  • variation in the health care needs of states’ Medicaid populations;
  • geographic cost differences;
  • state fiscal resources;
  • verification of the number and eligibility of enrollees;
  • state flexibility to choose program design features; and
  • implications of Medicaid reform on other federally financed sources of health care and broader health care costs.

Contact Director of Policy Erin O’Malley at or 202.585.0127 with questions.


About the Author

Matt Buechner is the policy and advocacy associate for America's Essential Hospitals.

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