Medicaid Enrollment & Spending Growth: FY 2016 & 2017

Methodology

Definition of Medicaid Spending. Total Medicaid spending includes all payments to Medicaid providers for Medicaid covered services provided to enrolled Medicaid beneficiaries. Medicaid spending also includes special disproportionate share hospital (DSH) payments that subsidize uncompensated hospital care for persons who are uninsured and unreimbursed costs care for persons on Medicaid. Not included in total Medicaid spending are Medicaid administrative costs and federally mandated state “Clawback” payments to Medicare (to help finance the Medicare Part D prescription drug benefit for Medicaid beneficiaries who are also enrolled in Medicare.) States are also asked to exclude costs for the Children’s Health Insurance Program (CHIP) though a few states provided percentage changes for spending that reflected Medicaid and CHIP combined. Total Medicaid spending includes payments financed from all sources, including state funds, local contributions, and federal matching funds. Historical state Medicaid spending refers to all non-federal spending, which may include local funds and provider taxes and fees as well as state general fund dollars. State spending for FYs 2016-2017 collected as part of this survey reflect state spending, largely state general fund dollars.

Methodology. The Kaiser Commission on Medicaid and the Uninsured (KCMU) commissioned Health Management Associates (HMA) to survey Medicaid directors in all 50 states and the District of Columbia to identify and track trends in Medicaid spending, enrollment, and policy making. This is the sixteenth annual survey, conducted at the beginning of each state fiscal year from FY 2002 through FY 2017.

The KCMU/HMA Medicaid survey for this report was sent to each Medicaid director in June 2016. Medicaid directors and staff responded to the written survey and participated in follow-up telephone interviews from June through August 2016. The telephone discussions are an integral part of the survey to ensure complete and accurate responses and to record the complexities of state actions. All 50 states and DC completed surveys and participated in telephone discussions. At the time of the survey, Illinois did not have an enacted state budget for FY 2017; certain portions of the Illinois survey could not be completed.

For FY 2016 and FY 2017, annual rates of growth for Medicaid spending were calculated as weighted averages across all states. Weights for spending were derived from the most recent state Medicaid expenditure data for FY 2015, based on estimates prepared for KCMU by the Urban Institute using CMS Form 64 reports, adjusted for state fiscal years. These data were also used for historic Medicaid spending. In FY 2013, there was wide inexplicable variation between states, which inflated the overall growth rate. To adjust for this anomaly, spending growth from FYs 2012, FY 2013, and FY 2014 was averaged to estimate growth in FY 2013. The resulting estimate is similar to trends reported by the National Association of State Budget Officers (NASBO).

Medicaid average annual growth rates for enrollment were calculated using weights based on Medicaid and CHIP monthly enrollment data for June 2016 published by CMS.¹ Historical enrollment trend data for FY 1998 to FY 2013 reflects the annual percentage change from June to June of monthly enrollment data for Medicaid beneficiaries collected from states.² Enrollment trend data for FY 2014 to FY 2016 reflects growth in average monthly enrollment based on Medicaid & CHIP Monthly Applications, Eligibility Determinations, and Enrollment Reports from CMS. The baseline for FY 2013 was the monthly average of July 2013 through September 2013 as of August 2015. FY 2014 was estimated by averaging the monthly average of July 2013 through September 2013 with the monthly average of January 2014 through June 2014.

The data reported for FYs 2016 and FY 2017 Medicaid spending and FY 2017 for Medicaid enrollment are weighted averages, and therefore, data reported for states with larger enrollment and spending have a larger effect on the national average. To understand variation across expansion and non-expansion states, median growth rates were calculated based on Medicaid expansion status in each year for FY 2015 – FY 2017.

Additional information collected in the survey on policy actions taken during FY 2016 and FY 2017 can be found in the companion report at: www.kff.org