Last month, CAPsules addressed alternatives to current methods for federal funding of Medicaid and examined “block grants” -- a method by which a total fixed dollar amount is given to every state to run the program. Another path being considered is the “per capita allotment” model, consisting of a per-patient-per-month capped amount.
The restructuring of Medicaid funding forms part of the current debate over proposed methods to repeal the Affordable Care Act (ACA). House Speaker Paul Ryan (R-WI) made this an integral piece in his plan, "A Better Way: Our Vision for a Confident America," produced by the GOP Health Care Reform Task Force. Among the many healthcare related topics in it, more details are laid out as to how this per capita allotment model would be structured, including statutory changes to grant states greater flexibility to determine eligibility and level of benefits.
At the center of both models is the assertion that reform will mean greater empowerment for states to run their Medicaid programs (“Medi-Cal” in California). But the proposals differ greatly, in that block grants do not account for growing enrollment while the per-capita caps model does. Considering that Medicaid is today’s largest single insurer (providing coverage and care for over 73 million low-income individuals -- and growing), the per capita allotment approach would account for all persons enrolled in the program and also those who might not have been expected to sign.
In its most basic form, a per capita allotment would be the product of caps designated for the four major beneficiary categories—aged, blind and disabled, children, and adults—and the number of enrollees in each of those four categories. Excluded from the allotment and calculated through a separate funding stream would be federal payments to states with Disproportionate Share Hospital programs, as these hospital facilities qualify for adjustments due to the significantly greater number of low-income and/or uninsured patients they serve.
Should this model be adopted, allotments would be applied in 2019 with amounts determined by each state’s average medical assistance and non-benefit expenditures per full-year during base year 2016. While the report recognizes that Medicaid is a “critical lifeline for some of our nation’s most vulnerable patients,” the "A Better Way" plan proposes models that ultimately result in substantially scaling back federal monetary contributions to these programs.
See Also “What Would Block Grants or Limits on Per Capita Spending Mean for Medicaid?”