As Congress and the White House wrangle over a compromise to avert the fiscal cliff, the anxiety (for hospitals) and expectation (among experts) regarding possible Medicare cuts is clear, as my colleague Jessica Zigmond reported.
Now, new reports on state budgets suggest continued strain on Medicaid (another major insurer) despite a modest recovery under way.
State budgets have recovered slowly from the last recession. Medicaid, which is jointly financed by states and the federal government, accounts for the single largest state expense. Medicaid paid $152.5 billion to hospitals in 2010, or nearly one-fifth of spending on U.S. hospitals that year.
Even the good news about state budgets comes with a caveat. For the first time since the downturn, state revenue in the coming year will exceed revenue states collected in 2008—but only without adjustment for inflation, the National Association of State Budget Officers reported last week. (It is “a turning point,” the group said.)