By NextBestFitPhase 0: Preparation · Step 0.1
Set each state's contribution
Months −16 to 0 · HHS / Treasury / statesDiscuss this step
Pros & cons of this step
Pros
- +States save money overall $146.3B a year combined, before $18.5B in new state income-tax revenue.
- +Removes the Medicaid budget's crowd-out of education spending in state budgets.
Cons
- −States with low Medicaid spending per person (often Southern, non-expansion states) have the smallest MOE and gain the most federal money; high-spending states pay in more. This is an interstate transfer.
- −Indexing to national growth may not match each state's own population changes.
- Freezing state contributions at 2024 levels locks in historical differences between states; redesigning the formula from scratch would be fairer but would shift costs sharply between states.
Trade-off behind each cost item
- Existing public money keeps flowing, now to UHP instead of separate programs.
- State & local government budgets+$146.8BStates gain money but lose control of Medicaid; high-Medicaid-spending states pay more MOE per resident than low-spending states.
Trade-off behind each system change
- Section 1332 (ACA) and Section 1115 (Medicaid) waiversEnds coverage restrictions like work requirements; states lose broad waiver flexibility.
- State provider taxes and intergovernmental transfers funding MedicaidEnds a financing gimmick; states that relied on it must replace the revenue within their MOE.