Healthcare Business News

Late News: Medicaid spending growth in 2012 lowest since 2006

By Modern Healthcare
Posted: October 27, 2012 - 12:01 am ET

Total Medicaid spending grew 2% on average across all states in fiscal 2012, the lowest rate of growth since 2006 and down from the 9.7% growth rate in fiscal 2011, according to the 12th annual 50-state Medicaid budget survey conducted on behalf of the Kaiser Commission on Medicaid and the Uninsured. The survey, which covers states' fiscal 2012, shows that Medicaid enrollment grew 3.2% in the same period, down from a 4.4% increase the previous year. For most states, their fiscal year ends June 30. The lower rate of Medicaid spending growth was likely caused by a slowly improving economy, which would moderate Medicaid enrollment, and by states enacting cost-control efforts as they took on a greater share of Medicaid obligations with the end of enhanced federal funding tied to the American Recovery and Reinvestment Act of 2009, according to a news release on the report. “Reining in costs remains the dominant theme, but the improving economy has offered states more leeway to move forward on delivery system reforms and implementation of the (Patient Protection and) Affordable Care Act,” said Diane Rowland, executive vice president of the Kaiser Family Foundation and executive director of the Commission on Medicaid and the Uninsured. Looking ahead, the survey indicates that the states expect continued low rates of growth, with Medicaid spending expected to grow 3.8% on average and enrollment growth of 2.7%, according to the survey.

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