Essay on Impose Caps on Federal Spending for Medicaid

Published: 2021/11/15
Number of words: 692

Medicaid is a combined federal-state healthcare program for low-income groups, mainly family groups with dependent children, seniors (aged 65), disabled individuals, as well as – at national discretion – other non-aging adults whose incomes in the federal poverty level represent up to 138 percent. Under present legislation, the federal and state governments share in the financing and administration of Medicaid. A majority of Medicaid funds is provided by the federal government; the legislative, regulatory, and administrative framework of the program is set up; and state compliance with the Program regulations is monitored. The federal government defines which categories of individuals and health services the states must cover as part of their duties. The program may be covered at the discretion of the States. The states themselves manage the day-to-day operations of the program, reimburse medical providers and plans, and establish what eligibility and services are available (Office).

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Capping Medicaid spending would undercut the historical role played by the federal government in sharing the financial responsibilities of the Medicaid program with the states. A number to the approximately 73 million registered individuals in Medicaid would have resulted in a severe decrease in federal assistance for healthcare and long-term services (MANN & STRIAR, 2019). The federal government and states are now shared with all expenses connected with the Medicaid program, but limited federal money is likely to put states at danger of increased healthcare costs and, depending on the proposal’s design, rise in debt. Such ideas will undoubtedly compel states to make difficult decisions about increasing their expenditures to make up the federal share they have lost or reducing coverage, benefits, and access to keep their expenditure within their limits. Medicaid offers vital health services and long-term assistance to many in our societies, especially seniors and handicapped individuals, who are most vulnerable. The health and welfare of these people are being jeopardized by a major restructuring of the Medicaid funding program.

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The proposed Budget Plan, adopted in the House, would make it difficult for many providers – including hospitals, nursing homes, doctors, and pharmacies – to remain economically viable, and to provide healthcare services and long-term care, notably in under-service areas, to weaken the health infrastructure of the nation. In addition to the severe effects of the proposal on Medicaid recipients — millions of whom might lose their health care benefits — and on the countries, which face much higher expenses. The financial condition of public hospitals is far more fragile than non-public hospitals: they have had smaller profit margins for many years than in the rest of the hospital business and depend significantly on Medicaid funding. Medicaid income for public hospitals is over two-fold, with almost all hospitals receiving 18 percent. The impact of the budget plan for this House would likely be comparable to the effect on public hospitals for other safety-net institutions. In underprivileged regions with significant numbers of Medicaid, for instance, several Catholic hospitals are located. The hospitals offer major services such as HIV/AIDS treatment, alcohol and drug misuse therapy, child wellness programs, as well as other services for social work. Other Medicaid services include support for the home and residential health services are provided by Catholic health facilities (CROSS-CALL, 2011). In addition, Medicaid is a strong source of patient income for children’s hospitals. In fiscal 2009, for example, the users of Medicaid accounted for 56 percent of all hospital days and 46 percent of outpatient visits. Since states are cutting hospital payments and reducing the eligibility for Medicaid, children’s hospitals would suffer large income losses, which would jeopardize their financial sustainability for lengthy periods.


CROSS-CALL, J. (2011, June 28). Health Care Providers Would Face Deep Cuts in Payments and Higher Uncompensated Care Costs Under Medicaid Block Grant. Retrieved from Center on Budget and Policy Priorities:

MANN, C., & STRIAR, A. (2019). The Risks of Capped Medicaid Funding. Journal of the Catholic Health Association of the United States. Retrieved from

Office, C. o. (n.d.). Options For Reducing the Deficit: 2017:2026. Retrieved from

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