Establishing a Medicaid Per Capita Cap: Implications for California

Prepared for the California Health Care Foundation

Both the House-passed American Health Care Act (AHCA) and the Senate’s draft Better Care Reconciliation Act (BCRA) of 2017 propose major changes to Medicaid’s financing structure. These include caps on federal funding for nearly all Medicaid beneficiaries and services. Currently the federal government covers a share of all Medicaid expenditures, but a per capita cap would eliminate this guarantee. Instead, states would be allocated a set amount per beneficiary. These amounts would be added together to establish an overall limit on expenditures that the federal government will match.

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To understand the implications of a per capita cap for California and the 13.5 million beneficiaries served by Medi-Cal (California’s Medicaid program), Manatt Health prepared an analysis for the California Health Care Foundation (CHCF) that:

  • Describes the cap proposals under consideration in Congress;
  • Provides estimates of the fiscal impact on California of the per capita cap included in the Senate’s June 22 BCRA draft, and illustrates the impact of changes in the trend factor;
  • Describes the operational issues and challenges created by a per capita cap; and
  • Reviews the choices available to California if a per capita cap is established.

To download a free presentation of the complete findings, click here.