Policy & oversight
Proposed Medicaid Funding Cap Could Cut Long-Term Care Access for Millions Who Also Have Medicare
A Medicare Rights Center analysis warns that converting Medicaid to a per-capita funding structure would shift rising care costs to states, putting nursing home care and home services at risk for the roughly 12 million Americans enrolled in both programs.
By the Goodsurance editorial teamJuly 26, 2026
About 12 million Americans are enrolled in both Medicare and Medicaid, a population often called dual eligibles. They tend to be among the oldest and most medically complex patients in the health system, and they rely on Medicaid for services Medicare does not cover, including nursing home stays, personal care assistance, and home and community-based supports. Dual eligibles represent roughly 23 percent of Medicaid enrollment but account for more than half of total Medicaid spending.
A Medicare Rights Center analysis published this week examines what a shift to per-capita cap financing would mean for these beneficiaries. Under the current open-ended federal matching structure, Washington pays a set share of whatever a state spends on Medicaid. Under a per-capita cap, the federal contribution would be frozen at a fixed amount per enrollee. States would absorb any cost growth above that ceiling.
A Medicare Rights Center analysis says capping Medicaid funding per person could strip nursing home and home-care access from 12 million people who hold both Medicare and Medicaid.
The analysis warns that states facing higher per-enrollee costs would likely scale back optional services first, including home and community-based programs that allow older adults to remain in their own homes. If optional services are cut, some beneficiaries could face nursing facility placements or gaps in personal care. The analysis notes that while nursing home care is a mandatory Medicaid benefit, states retain latitude in how they structure and restrict access to it.
For dual-eligible Medicare beneficiaries, the stakes extend beyond supplemental extras. Medicaid often covers the cost-sharing that Medicare imposes, the monthly Part B premium for low-income enrollees in savings programs, and the daily care that makes independent living possible.
In plain words
About 12 million people in the United States have both Medicare and Medicaid. Medicare pays for doctor visits and hospital stays. Medicaid pays for nursing home care and help at home. These people are called dual eligibles. They are often older or sicker than average. They make up about 23 percent of Medicaid members but use more than half of Medicaid spending.
Right now, the federal government pays a share of every dollar a state spends on Medicaid. A proposal in Congress would change that. Instead, the government would set a limit on how much it pays per person per year. If a state's costs go higher, the state pays the extra.
A consumer group called the Medicare Rights Center says this change would be hard on dual-eligible seniors. States might cut home care programs or make it harder to qualify for nursing home coverage to stay under the limit. That could mean more people lose the daily help they need to stay home safely.
Understand the basics first
Source: Medicare Rights Center
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