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Medicaid and Block Grant Financing Compared

– Issue Brief

State and federal budget pressures, rising health care costs, and new waiver initiatives have promoted debate over restructuring Medicaid at the federal and state level. Questions about how Medicaid is financed are central to this debate. This paper compares the current Medicaid financing system to a generic block grant financing system to illustrate the key differences in the structure and incentives of these alternative approaches.

Issue Brief (.pdf)