Block grants could reduce Medicaid spending by $150B per year: 4 key notes

Washington, D.C.-based consulting firm Avalere Health released research on the potential effect block grants or per capita caps could have on Medicaid.

Here's what you should know.

1. Legislators are discussing two methods for reducing Medicaid spending; block grants or per captia caps. With block grants, the federal government would give a set amount of funding to each state. Per capita caps work in a similar way, but with a population adjustment for the amount of funds.

2. Avalere projects that block grants would lower Medicaid spending by $150 billion and per capita caps would lower spending by $110 billion.

3. Currently, the government contributes a fixed amount to each state's actual spending. States with more spending receive more and vice versa.

4. If either of the proposed changes comes to fruition, their level of impact could differ because of several factors including the current federal match rate, Medicaid expansion and eligibility criteria and scope of benefits.

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