Noteworthy News

Will Growing Medicaid Costs Swamp State Budgets?

Many states that expanded their Medicaid programs under the Affordable Care Act have experienced far greater increases in enrollment than projected and are now worried about their future ability to pay for the increased costs associated with that greater enrollment.

Medicaid enrollment growth in California was three times projected growth and in Kentucky it was twice the anticipated amount. Overall, more than a dozen states have experienced increases in enrollment that far exceeded their projections and many are now revising their spending projections to reflect those increases.

iStock_000015725011XSmallThe federal government is paying the full cost of Medicaid expansion through 2016 but will begin to pay less in 2017 until, by 2020, the state share of Medicaid expansion will be 10 percent of those expansion costs.

While some state officials worry about where they will find the money to pay the unexpected costs, others maintain that they will save money in the long run because they will be able to eliminate some state programs that serve the uninsured, including supplemental payments to hospitals, and the job creation associated with serving more patients will stimulate state economies and generate more tax revenue.

Learn more about the challenges unexpectedly great Medicaid enrollment is posing to some states and how those states are responding to those challenges in this Associated Press report.

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