Essentials of Health Policy and Law 2nd Edition by Joel Teitelbaum,Sara Wilensky

Exercise 17

States have enormous flexibility in designing their Medicaid programs. States spend significant resources on optional services or mandatory services for optional populations. Yet, states complain that Medicaid expenditures are unsustainable and that significant reform, such as the DRA, is needed. If states have the ability to reduce Medicaid spending without any reforms, why do you think state politicians are focused on reforming the program? Why might states choose not to reduce their Medicaid program to cover only mandatory services and populations? Politically, what do you think is the most feasible way for states to reduce their Medicaid budgets?