Exploring Human Potential

Medicaid Caps and Paul Ryan’s “Good Old Days”.

Posted on | March 16, 2017 | No Comments

Paul Ryan’s “A Better Way” is actually the same old way circa 1960 when Medicaid Caps were all the rage, with Welfare providing “medical vendor payments”. What did that look like?

  1. State spending was low: $12 billion nationwide in 2014 dollars covering <2% of citizens.
  2. Eligibility, coverage and utilization were tightly constrained.
  3. No care for children in 11 of 50 states.
  4. No hospital coverage, doctor coverage, medication coverage in 20 of 50 states.
  5. Decisions on coverage could be quite arbitrary: Kentucky – hospital coverage only for “life-threatening ” conditions, Montana – coverage for hospital only if vision threatened.

Caps were lifted in 1965. Medicaid programs are now required to cover certain programs.

Expert Opinion:

“Federal mandates and open-ended federal cost sharing are meant to provide incentives for state spending, but states often balk at the large costs. Both state and federal budgets would benefit if each Medicaid recipient cost less. Unfortunately, a per capita cap on federal Medicaid spending is unlikely to achieve this aim. Rather than “modernize” Medicaid, the historical experience in the United States suggests per capita caps would simply shrink the program.”


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