Strategies to Reduce Medicaid Spending : Findings From A Literature Review

Congress is considering fundamental changes to Medicaid’s financing structure that seek to make federal funding for Medicaid more predictable and achieve substantial federal budgetary savings. The American Health Care Act (AHCA) as passed by the House of Representatives converts federal Medicaid matching funds, which currently are guaranteed as state spending increases, to a per capita cap that would limit the amount of federal Medicaid funding that states could receive per enrollee. Under the AHCA, states also would have the option to receive a block grant, a set amount of federal Medicaid funding that would not vary based on enrollment, for certain populations.