Twenty-four states said they will have Medicaid budget shortfalls in fiscal 2005, up from 20 in fiscal 2004, and the program remains the fastest growing category of state spending, according to a report by the National Governors Association and National Association of State Budget Officers.
Average funding for state Medicaid programs, including both federal and state contributions, is expected to grow 8.8% in fiscal 2005 -- reaching a total of $329 billion -- after an 8.7% increase last year, according to the report. Medicaid would grow 4.9% under the governors' recommended fiscal 2006 budgets.
Overall, the budget picture for states improved in fiscal 2005, with 42 states reporting revenue above projections while three met projections.
NGA Executive Director Raymond Scheppach warned that another economic downturn would force states to cut higher education funding in order to meet Medicaid needs. Read the report.