A new report out today from the National Governors Association and the National Association of State Budget Officers finds that while state budgets are slowly growing, Medicaid costs “continue to outpace the growth in tax revenue.” From the report:
Factors causing rapid growth in Medicaid costs for states include: increased enrollments (because of both the weak economy and expanded eligibility under health care reform); the elimination of federal funds associated with the enhanced matching rate of state costs from the Recovery Act; and per capita health care costs in general increasing faster than the economy. With Medicaid costs growing significantly and state revenue collections growing at a much slower pace, states are likely to face tight fiscal conditions for the foreseeable future.
Consequently, most states have already tried to contain Medicaid spending by restricting provider reimbursements or reducing certain Medicaid benefits, and are now looking to further expand “managed care and coordinated care options, using health homes for those with chronic conditions, pursuing dual eligible initiatives to provide managed care services for those eligible for both Medicare and Medicaid.” For 2012, state budgets “call for a $19.4 billion increase in Medicaid spending, which already accounts for more than a fifth of total spending.”
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