Republicans propose Medicaid caps

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Under the plan Upton and Hatch outlined, the federal government's share of each state's Medicaid payments would be determined by the type of patients who use Medicaid.

Separate funding pools would be created for the four populations Medicaid serves: elderly beneficiaries, disabled people, children and adults. The proposal would cap per-person spending within each category.

"Bipartisan per capita cap reforms would insert desperately needed fiscal discipline in Medicaid while preserving access to care for beneficiaries," Upton and Hatch's proposal says.

The blueprint also calls for more flexibility for the states. It would repeal a provision of the Affordable Care Act that prevents states from making certain cuts to their Medicaid rolls. 

States also would have an easier time obtaining waivers to test new approaches to their Medicaid programs. The federal Medicaid agency would have to approve any state's waiver request if it had previously approved a similar waiver for another state.