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Stephanie Pellitt

Policy and Advocacy Associate

Block Grants, Per Capita Caps Would Slash Medicaid

January 5, 2017 | Medicaid | Comments
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The 115th Congress is considering a potentially dramatic refinancing of Medicaid. Current proposals to block grant or institute per capita caps on Medicaid could ultimately shift costs onto states and enrollees, restrict access to care and increase the number of uninsured and underinsured. Despite promises of greater flexibility for states under a new system, the ultimate goal of these proposals is to massively cut federal spending for Medicaid, potentially leaving millions without needed care.


Block grants and per capita caps would fundamentally redefine Medicaid funding, which is currently financed through an open-ended federal-state matching formula. However, under these alternative proposals, the federal government would pay its share of a state’s Medicaid costs only up to a total set amount. States would bear 100% of any medical costs that exceed the block grant or caps. It is estimated that these proposed changes would result in a total of $1 trillion in cuts to federal Medicaid spending over the next ten years. For more information on block grants and per capita caps, see our

National Council Fact Sheet on Block Grants, Per Capita Caps and Medicaid.


The dramatic loss of federal funding could have devastating effects on states, providers and beneficiaries. With less federal funding to work with, states will likely consider the following options:

  1. Reducing Medicaid eligibility (including limiting or eliminating Medicaid population expansion)
  2. Restricting benefits and services offered to Medicaid beneficiaries
  3. Imposing work requirements and/or cost-sharing for Medicaid beneficiaries
  4. Cutting payments made to health care providers
  5. Contributing more state general revenue funds to Medicaid


With major proposed changes to the Medicaid as well as the Affordable Care Act, the National Council is reliant upon its members to act NOW to protect consumers’ access to care. NOW is the time for everyone in the behavioral health community to speak loudly and often to Congress. Visit our Act NOW page to see the latest on what you and your organization can do protect Medicaid and fight against block grants/per capita caps.

In the coming months, the National Council will be calling on advocates repeatedly to make their voices heard. Be sure to check the Act NOW page every week to participate in the latest call to action for advocates and to find helpful resources like the National Council’s Fact Sheet on Block Grants, Per Capita Caps and Medicaid and Fact Sheet on the Impact of Medicaid Expansion on Mental Health, Addictions Patient Population. Your voice makes a difference.