Medicaid is built upon a contradiction: a federal program to provide healthcare benefits for the poorest Americans is financed through a system of grants that go disproportionately to the wealthiest states.
This is because there is no limit to states’ ability to claim generous federal matching funds, and the richest states can go furthest in doing so. Over recent years, the concentration of Medicaid funds on the wealthiest states has accelerated – such that increased expenditures serve more to displace private financing for healthcare than to fill unmet medical needs.
Medicaid provides federal funding for states to spend on healthcare services for eligible low-income beneficiaries. States have much discretion in designing benefit structures, provider payment terms, and eligibility criteria within broad federal rules. But, unlike every other major federal grant program, there is no upper limit on the amount of funding which states may claim under Medicaid.
Continue reading the entire piece here at Health Affairs
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Chris Pope is a senior fellow at the Manhattan Institute. Follow him on Twitter here.
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