Hatch, Upton Highlight GAO Report Examining Ways to Reform Medicaid’s Financing

Non-Partisan Watchdog Outlines Policy Considerations Designed for Medicaid Per Capita Allotment Reforms

WASHINGTON - Senate Finance Committee Chairman Orrin Hatch (R-Utah) and House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) today highlighted a new report from the non-partisan Government Accountability Office (GAO) detailing policy considerations regarding per capita Medicaid caps as Congress explores possible approaches to reform and sustain the Medicaid program, which comprises an ever increasing share of federal and state budgets. The report, which was requested jointly by the chairmen, outlines how the design of per capita caps in Medicaid should consider coverage and flexibility, allocation of funds over time, accountability and other issues if such a reform was implemented. In response, the chairmen issued the following statements:

“With Medicaid growing at an unprecedented rate, Congress will be forced to look for ways to reform the program as we look toward the future in order to uphold care for our nation’s vulnerable families,” Hatch said. “On the financing front, a per capita approach is a worthy option that could, when paired with other program reforms, set Medicaid on a fiscally responsible course while protecting beneficiaries from harsh, across the board cuts in the future. The GAO’s work on this issue provides us with the information we need to explore this idea in greater detail as we continue the conversation on how to best finance the Medicaid program in our changing world.”

“Medicaid is a critical program that continues to be relied upon by our nation’s most vulnerable folks. About 20 years ago, then-President Clinton proposed reforming Medicaid’s financing with a per capita cap. Today’s program is about three times larger than it was in 1997, and the program’s outlays are set to roughly double over the coming decade. In order to ensure it meets the demands of those it currently serves, and those it will serve in the future, it is imperative we examine ways to improve the incentives and flexibilities in the program, while protecting the care of the people Medicaid serves,” Upton said. “This carefully researched report gives lawmakers useful considerations for further discussions about policies that could strengthen Medicaid for the most vulnerable.”

Background:

In 2013, Hatch and Upton authored a report, Making Medicaid Work, which included proposals to implement a per capita allotment in an effort to curb long-term increasing program growth while prioritizing the most vulnerable by giving States new tools and improving how Medicaid directs federal financing to provide care for the most vulnerable.

Hatch and Upton’s Obamacare replacement plan, the Patient CARE Act, contains numerous Medicaid reforms, including a kind of per capita spending allotment for Medicaid spending.

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