In its fiscal year 2025 budget, Congress intends to include reconciliation instructions that direct various committees to address health care spending. In a new insight, Health Care Policy Analyst John Walker explores several discussed provisions to reform Medicare and Medicaid that will both save federal dollars and promote responsible stewardship and sustainability of these programs.

He concludes:

Independently, each Medicaid reform might result in a moderate-to-large impact on federal Medicaid spending and how the federal and state governments interact, depending on the specific legislative language that is agreed upon. If enacted collectively, however, the total impact of these reforms would likely cause a significantly different impact than that of each independent reform. Because each provision alters a different link in the Medicaid chain, the forecasted savings of each provision cannot simply be added together to accurately forecast total savings. For example, if Congress were to repeal the finalized Medicaid eligibility rules and approve PCCs [per capita caps] in the same budget, it’s likely that the multiplicative effect of tying federal reimbursements to a state’s population count, while also allowing states to increase their verification processes, might yield significantly higher savings than independent passage.

Read the analysis.