• Analysis or Summary
  • July 17, 2019

Avalere Report: The Effect of Block Grants and Per Capita Caps on Children

Given renewed focus on transitioning Medicaid to a block grant or per capita cap funding mechanism, the health care consulting firm Avalere analyzed the potential impact on federal funding to states as a result of moving to a capped funding methodology. Avalere's estimates for a potential loss in federal funding to states, specifically for children, range from a loss of $89B to $163B for FY 2020-2029 nationally, depending on policy parameters. A reduction in federal Medicaid funding would require states to reduce spending in Medicaid or in other areas of their budget. In particular, states may reduce eligibility for coverage, limit access to covered benefits or services, increase beneficiary cost sharing or decrease payment for care, and/or seek other sources of funding. Full details, including analysis by state, can be found in the report.