Many States Increasing Medicaid Benefits in FY 2015, Survey Finds

Twenty-two states are increasing benefits for Medicaid beneficiaries in fiscal year 2015 and two states are cutting benefits, according to a survey released Tuesday by the Kaiser Family Foundation and the National Association of Medicaid Directors, Kaiser Health News' "Capsules" reports.

The survey included an analysis of 50 state Medicaid programs.

The two states cutting Medicaid benefits mark the fewest states to do so in the last nine years, according to the survey.

Among the states adding benefits, the most common new benefits include:

• Dental coverage;
• Mental health care; and
• Substance misuse services.

The survey also found that more states are increasing provider payments in FY 2015. Specifically, 14 states are increasing fees to specialists, compared with three states that were cutting them. Further, many states are increasing fees to managed care organizations and nursing homes.

However, the survey found a few exceptions in which more states are cutting pay rather than increasing it. For example:

• 31 states are decreasing or freezing Medicaid hospital rates, compared with 19 that are increasing them; and
• 36 states are either not extending the reimbursement increase for Medicaid primary care providers, or were undecided.  

In addition, nearly every state expressed concern about costly specialty drugs, such as the $1000-per-pill hepatitis C drug Sovaldi. Further, 22 states said they have implemented prior authorization rules -- or are planning to do so -- to restrict use of the drug (Galewitz, "Capsules," Kaiser Health News, 10/14).

Non-Expansion States To Increase Spending

In related news, states that did not expand their Medicaid programs under the Affordable Care Act will increase state Medicaid spending this year by 2.4 percentage points more than expansion states, according to a separate Kaiser Family Foundation analysis, CQ HealthBeat reports.

Specifically, state Medicaid spending in non-expansion states is expected to grow by 6.8%, compared with 4.4% in expansion states. Overall, total spending in expansion states will increase by 18.3%, compared with 6.5% in non-expansion states.

According to the analysis, spending will increase even though Medicaid enrollment in non-expansion states during FY 2015 is expected to increase by only 5.2%, compared with an estimated 18% enrollment growth in expansion states.

The slower state spending increase in expansion states can partially be attributed to higher federal funding matching rates, CQ HealthBeat reports. According to CQ HealthBeat, CMS through 2016 is covering the cost for all newly eligible individuals under the ACA's Medicaid expansion before gradually decreasing the matching rate to 90% by 2020 and beyond. However, CMS pays a lower amount for individuals who qualify for Medicaid under the old eligibility rules.

The analysis also found that:

• Four states -- Arkansas, Indiana, Louisiana and Maine -- limited Medicaid eligibility during FY 2014, while none plan to do so in FY 2015;
• 31 states said they expanded eligibility during FY 2014, in some cases even beyond the ACA, while nine states said they plan to expand eligibility in FY 2015;
• Total Medicaid spending across all states increased on average by 10.2% in FY 2014, while it is expected to grow by 14.3% on average during FY 2015; and
• Three-quarters of states said they do not expect a deficit in their Medicaid budgets (Adams, CQ HealthBeat, 10/14).