Abstract:
The federal government provides an uncapped reimbursement of state Medicaid spending. In theory, states can use the federal Medicaid funds as a replacement for state funds or the federal funds, which take the form of a matching grant that reduces the relative price of Medicaid, can increase (or stimulate) spending on Medicaid with state-raised tax revenue. In the first dissertation paper, Subsidizing Medicaid Growth: The Impact of the Federal Reimbursement on State Medicaid Programs, I use a state panel data set from 1992 to 2006 to assess the impact of the federal reimbursement on the size of state Medicaid programs. I find that a one point increase in a state's Medicaid reimbursement percentage increases state per capita Medicaid spending between $5 and $16 and increases the percentage of the state's population receiving Medicaid benefits by 0.04 percent to 0.29 percent.
