Medicaid Spending To Jump Almost 6% in 2008, Survey Predicts
Medicaid spending will increase by an estimated 5.8% in fiscal year 2008, compared with 6.6% in FY 2007, according to an annual survey conducted by the National Governors Association and the National Association of State Budget Officers, CQ HealthBeat reports.
According to the survey, all states in the past five years have implemented measures to limit Medicaid spending, "with the majority centered on freezing or reducing provider payments and managing prescription drug costs." However, the survey found that Medicaid accounts for 22% of state spending and "continues to constrict state budgets as it has for many years."
The survey found that governors in 34 states have introduced proposals to reduce the number of uninsured residents in FY 2008. The proposals include expansions of SCHIP and Medicaid and revisions to Medicaid allowed under the federal Deficit Reduction Act of 2006, according to the survey.
"Proposed fiscal 2008 funding for these programs totals nearly $18.4 billion," the survey found. The survey also found that "fiscal conditions have been strong and stable" in the states and that only three states "were forced to reduce their enacted budgets by an aggregate $170 million" in FY 2007.
"Even with the more moderate growth rates in health care spending from the height of the most recent fiscal downturn, projections over the next decade remain at an average annual rate of about 8% from fiscal 2008 through fiscal 2017, according to the most recent estimates by the Congressional Budget Office," the survey found (Reichard , CQ HealthBeat, 6/5).
NASBO Executive Director Scott Pattison said, "This report demonstrates that most states are still in good financial shape, but some are expecting their revenue and spending growth to decline somewhat over the next year or two."
NGA Executive Director Raymond Scheppach said, "Governors realize that meeting these ever-increasing expenditure expectations with limited revenues will be problematic in the future" (Leonatti, CongressDaily, 6/6).
In related news, CBO on Monday estimated that an immigration bill (S 1348) under consideration in the Senate would increase federal spending by $10 billion from 2008 to 2012 and by $23 billion from 2008 to 2017, CQ HealthBeat reports. From 2008 to 2012, the legislation would increase federal Medicaid spending by $300 million and would increase spending on refundable tax credits by $6.8 billion, according to CBO. CBO also estimated that the bill would increase federal Medicaid spending by $3.1 billion from 2008 to 2017 and increase Medicare spending by $1 billion over 10 years.
The legislation would expand the number of documented immigrants allowed in the U.S. Under the bill, all immigrants would qualify for emergency care when they enter the U.S., and some would qualify for non-emergency care under Medicaid after five years. In addition, some immigrants, such as "additional children that would be born in the U.S. as a result of higher immigration," would qualify for all Medicaid benefits after five years. According to CBO, increased tax revenue in large part would offset increased federal spending under the bill (Reichard , CQ HealthBeat, 6/5).