As policymakers in Washington discuss Affordable Care Act repeal and a possible block grant for Medicaid, a new issue brief from the Kaiser Family Foundation lays out key questions to consider in restructuring federal financing of the nation’s health insurance program for low-income Americans.

Capping federal funding for Medicaid through a block grant or a per capita cap financing system would make federal spending more predictable and achieve federal budget savings. It also could be structured to give states greater flexibility in how they operate their Medicaid programs, eliminate the entitlement to coverage, reduce federal Medicaid spending and shift costs to states, which would also affect beneficiaries and providers. A cap on federal spending would render state Medicaid programs less responsive to changes in demand, economic circumstances and medical costs.

The new brief explains how a per capita cap or block grant system would work as well as the details needed to evaluate any policy proposals and implications of restructuring Medicaid’s financing. It also examines the implications of shifting to such a system.

Also available is a new brief that provides an understanding of current federal standards for Medicaid eligibility and benefits as well as options for state flexibility in how the program is run today, which provides important context for ongoing policy debates in Washington.