States Spending More Money on Medicaid, According to Report
Total state spending on Medicaid reached almost $400 billion in fiscal year 2011 -- up by 10.1% from the year prior -- and is expected to account for larger portions of state budgets, according to a report released Tuesday by the National Association of State Budget Officers, Reuters reports (Lambert, Reuters, 12/13).
The report found that Medicaid spending accounted for 23.6% of all state expenditures in FY 2011, compared with 21.9% in FY 2009 and 22.3% in FY 2010 (Cooper, New York Times, 12/13).
In 14 states, Medicaid spending represented more than 25% of total expenditures, and in 12 states spending on the program grew by more than 10.1%.
In California, Medicaid spending accounted for about 40.8% of total expenditures.
Overall, cumulative state spending totaled $1.69 trillion in FY 2011 and $1.62 trillion in FY 2010, according to the report.
Possible Contributing Factors
The report attributed the increased spending in part to a downturn in the economy that caused an increase in program enrollment. The report found that Medicaid enrollment growth averaged 5.5% in FY 2011, and enrollment is expected to grow by 4.1% in FY 2012.
Meanwhile, the federal stimulus package -- which provided additional federal funding to states for the Medicaid program -- expired in December.
NASBO also warned that expected costs from the federal health reform law -- which is scheduled to expand Medicaid eligibility in 2014 -- will pose significant fiscal challenges that include "upgrading current Medicaid eligibility systems, accommodating the significant number of new enrollees under Medicaid, setting up health insurance exchanges, and dealing with the lack of administrative resources and staff at the state level" (Reuters, 12/13).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.