Moving Ahead Amid Fiscal Challenges: A Look at Medicaid Spending, Coverage and Policy Trends Results from a 50-State Medicaid Budget Survey for State Fiscal Years 2011 and 2012

Published: Oct 01, 2011

The 11th annual 50-State Medicaid budget survey from the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured finds that Medicaid officials in virtually every state are enacting a variety of cost cutting measures as states’ spending for Medicaid is projected to increase 28.7 percent in fiscal year 2012 to make up for the loss of federal stimulus money.

The temporary increase in the federal share of Medicaid spending under the American Recovery and Reinvestment Act (ARRA) brought about the only declines in state spending on Medicaid in the program’s history, even as the recession increased Medicaid enrollment and overall Medicaid spending. With that money having expired in June 2011, however, states must ramp up their own spending to replace the lost funds, even though states project total spending in the Medicaid program – which is jointly financed by the federal government and the states — to increase on average by 2.2 percent in FY 2012.

The survey finds cost containment actions ranging from restrictions on payments to providers and benefits, to new copayments for beneficiaries and additional efforts to contain the costs of prescription drugs. States also are trying to make their programs more efficient by increasing their reliance on Medicaid managed care, moving long-term care toward community-based care models, and streamlining enrollment procedures.

The state focus on cutting costs occurs as deficit reduction efforts in Washington could reduce federal support for Medicaid and shift costs to states and at a time when states, still coping with a weak economy, also must prepare for the expansion of Medicaid under the health reform.

Press Release