The newly elected Republican Congress seems set to place Medicaid reform at the top of its legislative agenda. Previous reform attempts have stumbled due to fears that cuts would leave the poorest beneficiaries uninsured. But, rather than cutting payments for core services, Congress can best curb rising Medicaid costs by limiting high-spending states’ further expansions of benefits and eligibility. 

To claim federal Medicaid funding, states must provide a core package of healthcare benefits to low-income parents, children, and elderly and disabled people. But 63% of Medicaid spending comes from states opting to expand benefits and eligibility beyond what is required by federal law.