A potential overhaul of the Medicaid program would significantly affect beneficiaries of Medicare as well, despite politicians’ assurances to the contrary. The way Medicaid is currently run, the federal government covers 50%-75% of Medicaid spending depending on states' per capita income relative to the national average, paying a greater share of poorer states' Medicaid expenses. The per-capita caps proposed in overhauls such as the withdrawn GOP repeal would also affect Medicare offerings, as around 11m Medicare beneficiaries also require Medicaid assistance. A per-capita cap would limit contributions by the federal government, making an open-ended state entitlement into a lump sum payment, and putting pressure on long-term supports and services (LTSS) that are seen as “optional”. These LTSS options in generous states currently help to make Medicare spending more efficient, leading to concerns that Medicare costs will increase without these services. In addition, changes to Medicaid, which is administered through states, could lead to cuts for low-income people who rely heavily on it.
A potential overhaul of the Medicaid program would significantly affect beneficiaries of Medicare as well, despite politicians’ assurances to the contrary. The per-capita caps proposed in overhauls such as the withdrawn GOP repeal would also affect Medicare offerings, as around 11m Medicare beneficiaries also require Medicaid assistance. A per-capita cap would limit contributions by the federal government, making an open-ended state entitlement into a lump sum payment, and putting pressure on long-term supports and services (LTSS) that are seen as “optional”. These LTSS options in generous states currently help to make Medicare spending more efficient, leading to concerns that Medicare costs will increase without these services. In addition, changes to Medicaid, which is administered through states, could lead to cuts for low-income people who rely heavily on it.