Using Medicaid Block Grants to Eliminate Moral Hazard
This paper seeks to determine whether states experience moral hazard in Medicaid spending due to the federal matching subsidies, which make it so states only pay a percentage of the full cost of Medicaid. Econometric analysis shows that: 1) those states which receive higher federal matching rates for Medicaid costs do spend more per individual beneficiary; and 2) those states which receive higher federal matching rates for Medicaid enroll fewer beneficiaries. As Medicaid spending continues to rise and our debt continues to grow, it is important to evaluate the incentives that are (or are not) in place to encourage efficient spending.
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A Bill to Amend Title XIX of the Social Security Act to Eliminate Federal Payments for Abortions Under the Medicaid Program Except for Abortions to Prevent the Death of the Mother. H.R. 2040, 96th Congress, 1st Session Unknown author (United States. Congress. House, 1979)