2 Federal Medicaid outlays grew by27.8 percent in 1991 and by another 29.1 percent in 1992. back

3 The plan assumes Medicaid outlays of $89.2 billion in 1995, with increases held to 7.2 percent in 1996, 6.8 percent in 1997 and 4 percent per year thereafter. The level of proposed spending is compatible with higher growth rates for benefits and administration if disproportionate share hospital payments, which are explained later in this paper, are frozen at 1995 levels. back

4 If the block grant spending were compared with Office of Management and Budget (OMB) projections, substantially smallerseven-year Medicaid savings would result from the block grant because the administrationassumes slower Medicaid growth. Over the period 1996 through 2002, OMB Medicaid projections are $66.8 billion less (cumulatively) than the CBO projections. Seven-year Medicaid savings from OMB projections would total $114.8 billion under the Budget Resolution Conference Report block-grant assumptions. back

5 Based on which projection is used, the block grant proposal promoted by Congress could result in savings of between $114.8 billion and $181.6 billion over the seven-year period between 1996 and 2002. back

6 Hilary Stout, "Contrasting Reactions to GOP Proposals to Cut Medicare, Medicaid Reflect Voting Blocs’ Power," Wall Street Journal, May 30, 1995. The same theme is developed in a Families USA report titled "Hurting Real People: The Human Impact of Medicaid Cuts," Washington, DC, June 1995. back

7 Lewin-VHI, "States as Payers: Managed Care for Medicaid Populations," National Institute for Health Care Management, Washington, DC, February 1995. back

8 U.S. General Accounting Office, "Medicaid: States Turn to Managed Care to Improve Access and Control Costs," GAO/HRD-93-46, March 1993, p. 39. back

9 Based on its analysis of the 1992 National Health Interview Survey, "The Effects of Managed Care and Managed Competition," CBO Staff Memorandum, February 1995, p. 2. back

10 Teresa Fama, Peter D. Fox and Leigh Ann White, "Do HMOs Care for the Chronically Ill?" Health Affairs, Spring 1995, p. 237. back

11 Nelda McCall, et al., "Evaluation of Arizona’s Health Care Cost Containment System Demonstration,” Draft Fourth Outcome Report, submitted to HCFA April 1995. back

12 See Brant S. Mittler and Merrill Matthews Jr., “Can Managed Care Solve the Medicaid Crisis?" National Center for Policy Analysis, NCPA Brief Analysis No. 155, April 10, 1995. back

13 Molly Hering Bordonaro, "Medical Savings Accounts and the States: Growth From the Grassroots," National Center for Policy Analysis, NCPA Brief Analysis No. 170, August 3, 1995. back

14 Mark E. Litow, "Reform Options for Medicare," National Center for Policy Analysis, NCPA Policy Report, forthcoming, August 1995. back

15 See, for example, Armond D. Budish, Avoiding the Medicaid Trap: How to Beat the Catastrophic Cost of Nursing Home Care, 3rd Ed. (New York: H. Holt, 1995). back

16 U.S. General Accounting Office, "Medicaid Estate Planning," GAO/HRD-93-29R, July 20, 1993; and "Medicaid: Recoveries From Nursing Home Residents’ Estates Could Offset Program Costs," GAO/HEHS-94-133, August 1, 1994. back

17 Marrilyn Serafini, "Plugging a Drain on Medicaid," National Journal, March 3, 1995, p. 687. back

18 Paul Offner, "Medicaid Games," New York Times, May 19, 1995, p. A 31. Also see GAO, “Medicaid: States Use Illusory Approaches to Shift Program Costs to Federal Government,- GAO/HEHS-94-133, August 1, 1994. back

19 U.S. General Accounting Office, "HCFA Needs Authority to Enforce Third-Party Requirements on States," GAO/HRD-91-60, April 1991. Also see GAO, "Medicaid: Millions of Dollars Not Recovered From Michigan Blue Cross/Blue Shield," GAO/HRD-91-12, November 1990. back