Medicaid eligibility, benefits, and provider payment: state preferences and implications for national goals

Abstract

This research relates the economic concept of preference to a political theory of policy-making. It regresses measures of state Medicaid eligibility, benefit coverage, and payment rate policies on sets of economic and political variables. Results suggest that political factors may help to determine state preferences for a trade-off between generosity to the poor (eligibility and benefits) and generosity to providers (reimbursement rates). Because the federal-state Medicaid financing scheme implies some national goals for the program, these results are important. If state decisions regarding the trade-off between eligibility/benefits and provider payment are based in part on political factors, then policy-makers may have to look to a stronger federal presence to ensure that national Medicaid financial and access-related objectives are met.