Medicaid enrollment and capitation Rates

Abstract

The brief's key findings are: The idea of capping federal Medicaid payments to states at a set amount per person has received recent attention, raising the question of how it would affect enrollment. For insight, this study looks at a current policy that requires states to pay the federal government a lump sum for each senior eligible for both Medicaid and Medicare. This lump sum, which varies by state, is a partial reimbursement for drug costs that the seniors incur under Medicare. The results show that the size of the per capita lump sum that states pay affects how many seniors they enroll in Medicaid. The implication is that, if Medicaid were subject to per-capita financing, the generosity of federal payments to the states would affect program enrollment.