Putting Medicaid in the Larger Budget Context: An In-Depth Look at Four States in FY 2016 and FY 2017

Medicaid has long-played an important role in the U.S. healthcare system, accounting for one in every six dollars of all U.S. health care spending while providing health and long-term services and supports coverage to millions of low-income Americans.¹ Medicaid also plays an important role in states budgets as both an expenditure item and the largest source of federal revenue for states.

Since 2014, an improving economy and the implementation of the Affordable Care Act (ACA) have been the primary drivers of Medicaid enrollment and spending trends. Medicaid enrollment and spending peaked in FY 2015, the full state fiscal year for states implementing the ACA, but growth slowed significantly in FY 2016 and FY 2017. Across the country, states remain focused on the ACA, but also on other priorities such as payment and delivery system initiatives designed to control costs and achieve better health outcomes. These policy priorities are playing out in the context of broader state budgets and an economy that varies across states, with some states experiencing steady economic growth and others facing declines in state revenues.

This report provides an in-depth examination of Medicaid program changes in the larger context of state budgets in four states:

• Maryland
• Montana
• New York
• Oklahoma

These case studies build on findings from the 16^th annual budget survey of Medicaid officials in all 50 states and the District of Columbia conducted by the Kaiser Commission on Medicaid and the Uninsured (KCMU) and Health Management Associates (HMA). Additional research on budget activity, economic conditions, and other relevant health policy activity was collected to supplement survey responses.