Obamacare boosts state Medicaid spending


States are spending more on Medicaid, but they're also receiving more from the federal government to cover the costs, according to a report from the National Association of State Budget Officers (NASBO).

The Affordable Care Act gave states 90 percent to 100 percent reimbursement for new Medicaid enrollees. So far, 23 states and the District of Columbia have expanded their traditional Medicaid programs, while four states have been granted waivers to pursue customized approaches.

Medicaid spending grew 11.3 percent in state budgets in fiscal 2014, the report notes. At the same time, federal funding for Medicaid increased 17.8 percent, while state funding for Medicaid grew only 2.7 percent, Reuters reports.

Medicaid became states' biggest budget item in FY 2014, at slightly more than a quarter of all state expenditures. However, elementary and secondary education consumed the most resources in state-only dollars, taking 24.2 percent of state funds, followed by 15.3 percent for Medicaid.

State Medicaid programs focus on controlling costs, selectively increasing payments and benefits, and changing delivery methods to improve care, the report states. NASBO expects the proportion of Medicaid benefits administered through a managed care plan to grow, with increased coverage for aged and disabled enrollees and long-term care services. States also are moving more toward home-and community-based care rather than institutional settings.

The future of Medicaid expansion remains unclear. Midterm elections returned to office several Republican governors who oppose expansion and tightened GOP grip on state Legislatures, The New York Times noted.

As FierceHealthFinance's Ron Shinkman said, rollback remains a possibility in some states, putting hospitals that serve the poor in a quandary.

To learn more:
- find the report (.pdf)
- read the Reuters article
- check out the Times piece

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