Per Capita Caps in Medicaid

Medicaid cost $432 billion in 2011, and Medicaid spending is expected to grow to $795 billion by 2021. Concerns over Medicaid’s contribution to fiscal pressures at both the federal and state levels have led some policy makers to urge reforms. One such proposed reform would be to impose a cap on the amount of federal spending per Medicaid beneficiary, or what’s called a “per capita cap,” so that any program spending growth would be linked to enrollment, not rising per beneficiary spending. This policy brief examines the issues surrounding per capita caps in Medicaid and explores other policy options for states and the federal government.