Increasing Medicaid Costs Over the Last Two Years Lead to Budget Deficits in 40 States
Increased state Medicaid costs over the past two years have contributed to $40 billion in budget deficits in more than 40 states, despite improvements in the national economy, according to a survey conducted by the National Governors Association, the Washington Post reports. The survey found that state Medicaid costs have increased 25% over the past two years, while state revenues have increased only 5%. NGA Executive Director Raymond Scheppach said that the cost of Medicaid "has reached the breaking point. The growth rate is simply unsustainable" (Pierre, Washington Post, 5/17). He added that health care costs today account for 27% of state budgets, a trend that he attributed in large part to increased prescription drug costs in state Medicaid programs (Rosenbaum, New York Times, 5/16). To address the issue, the NGA has lobbied Congress to increase the federal match rate for Medicaid by 1% for each state for 18 months, beginning April 1. The increase would provide the states with an additional $4 billion in Medicaid funds, the NGA said (Washington Post, 5/17). The NGA survey is available online. An NPR "Talk of the Nation" report on increased state Medicaid costs also is available online. Note: You must have RealPlayer to listen to the report.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.