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Monday, 8th August 2011

The High Cost of Capping Federal Medicaid Funding

Source: AARP Research Center

From the report:

Deficit reduction commissions and some policymakers are recommending the use of block grants (or other capped funding arrangements) to limit federal Medicaid spending. These recommendations may help balance the federal budget and provide states with more flexibility, but the price is high: Millions of Americans could lose access to basic health services, including long-term services and supports.

Medicaid is the major source of coverage for low-income children and the 16 million low-income older adults and persons with disabilities who need longterm services and supports. The program was designed so that financing is shared between the federal government and the states.  Medicaid rules require states to spend their own funds in order to receive federal matching funds for covered services provided to qualified individuals. Recent proposals would block grant, or otherwise cap, federal funding for Medicaid and give states additional flexibility over how they run their programs. Under a block grant (or some variation of capped funding), states would receive a predetermined allotment of funds, regardless of actual need or program costs. Under the current financing structure, the federal government shares the costs of medically necessary health and long-term care services for low-income people, whether those costs rise (or fall) due to state policy decisions (e.g., raising or lowering provider payment rates), or whether they rise (or fall) due to factors outside of the state's control (e.g., growth in the eligible population, health care inflation, or natural disasters).

Under the current federal-state partnership, the federal government pays well over half of state Medicaid costs. Recent proposals have sought to change this long-standing financial arrangement that, over the years, has ensured that the Medicaid program is there for people when they need it.

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An Info Pro, librarian, entrepreneur, author, worldwide connector and book-lover, Heather Negley is recognized for her new ways of thinking about librarianship, research, social media and creativity. Heather is the founder of HelpALibrarian.com and Zing Information Services. She has most recently been an Information Research Specialist with the Congressional Research Service at the Library of Congress where she provided business research for members of Congress and their staffs. Heather also worked as a research reporter for U.S. News and World Report and as a technical advertising producer on the washingtonpost.com. She received her MS in Library and Information Science from Simmons College in Boston, MA.

Heather can be reached at heather.negley@freepint.com

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