Tags: State | Medicaid | Costs | Surge

U.S. States’ Medicaid Costs to Surge 29% This Year, Survey Shows

Thursday, 27 Oct 2011 02:23 PM

State spending in the U.S. on Medicaid will surge 29 percent this year, even as governors slash the health program’s benefits and payments to hospitals and doctors, a survey showed.

States will have to spend more on the health program for the poor to offset the loss of $100 billion in U.S. funds authorized by the 2009 economic stimulus law and to accommodate higher enrollment due to the flagging economy, according to an annual survey of Medicaid officials released today by the Kaiser Family Foundation.

“Unemployment remains high with increasing numbers of poor and uninsured keeping pressure on state budgets and Medicaid programs to meet growing needs,” said Diane Rowland, executive vice president of the Menlo Park, California-based health-policy research group, in a statement.

The foundation’s estimate of a 29 percent increase in state spending is based on projections provided by state Medicaid officials. The survey didn’t ask how much states expect to spend in dollar figures.

States are “cannibalizing from education, transportation, corrections, everywhere else” in their budgets to pay for Medicaid, Matt Salo, executive director of the National Association of Medicaid Directors in Washington, said today in a telephone interview. “In any given state, literally every dollar of new revenue that’s coming in is all going to Medicaid.”

Medicaid is a joint state-federal program. States and the U.S. government were expected to spend about $442 billion combined on the health plan in 2011, according to the Centers for Medicare and Medicaid Services, with the federal government paying about 61 percent of the total.

Benefit Cuts

Under the 2010 health-care overhaul, which will expand Medicaid beginning in 2014, states are prohibited from cutting enrollment by reducing eligibility or making it harder for people to sign up. Governors have responded by cutting benefits and payments to providers instead.

Forty-six states plan to freeze or reduce payments to hospitals or other health providers this year, Kaiser said. Thirteen states have eliminated at least one benefit in the last two years, such as dental care, and “almost all states have been making substantial changes in Medicaid pharmacy programs,” the group said, such as requiring state approval for prescriptions that aren’t on a “preferred drug list.”

Hit the ‘Core’

“Many of the latest cuts will hit at the core of the Medicaid program,” Rowland said.

Most of the projected 29 percent increase in state spending “is really just to keep people on the program,” said Joy Johnson Wilson, health policy director for the National Conference of State Legislatures in Washington. “We knew it was a big hole, because the economy hasn’t improved that much -- not enough to get people into jobs and off of Medicaid.”

Fourteen states increased co-payments for Medicaid beneficiaries this year, and 24 expanded enrollment in managed- care plans run by companies including UnitedHealth Group Inc. and Centene Corp. About two-thirds of the nation’s 54 million Medicaid patients were enrolled in some kind of managed care plan in October 2010, the foundation said.

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State spending in the U.S. on Medicaid will surge 29 percent this year, even as governors slash the health program s benefits and payments to hospitals and doctors, a survey showed.States will have to spend more on the health program for the poor to offset the loss of $100...
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2011-23-27
Thursday, 27 Oct 2011 02:23 PM
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