Medicaid Spending and Enrollment Growth Slows

Overall Medicaid spending and enrollment growth slowed nationally, according to the results of a 50-state budget survey reported by the Kaiser Commission on Medicaid and the Uninsured. Spending increases in FY 2012 averaged just 2 percent, lower than in almost any other recorded year, and were expected to increase only slightly in FY 2013. The 3.2 percent enrollment growth rate was the lowest since the current recession began in 2008 and is expected to slow to 2.7 percent in FY 2013. The study attributed the slowed growth, in part to an improving economy.

Other factors contributed to the slowed growth, including the expiration of the increased federal matching rates implemented by the American Recovery and Reinvestment Act (ARRA) (P.L. 111-5). ARRA increased rates, which led to the distribution of $100 billion in federal funding to states over the course of three years. When the rates expired in 2011, states reined in spending.

The report also described a nationwide emphasis on cost containment, with 48 states employing policies to control Medicaid costs. The most common cost containment measures were restrictions on provider rates; however, more states increased rates for physicians, managed care organizations, and nursing facilities. States also continued to pursue efforts to move long-term care services from institutions to home and community-based programs.

Because the maintenance of eligibility provisions of Patient Protection and Affordable Care Act reduced states’ ability to restrict eligibility standards, eligibility levels remained fairly constant. However, many states are attempting to expand Medicaid coverage to new populations and implement more efficient enrollment processes. A small number of states, however, actually did limit coverage.

The report indicated that a majority of states are updating policies regarding managed care, often adding managed care to new geographic areas or are adding eligible groups. States are also making efforts to improve care for persons with complex, chronic conditions through the use of patient-centered medical homes, health home initiatives, and accountable care organizations. They are also making concerted efforts to improve care for individuals eligible for both Medicare and Medicaid, but have noted a number of difficulties, including setting provider rates and avoiding gaps in care.

 As federal elections loom, the report notes that states are waiting to determine whether and how to proceed with Medicaid expansion and which insurance exchange model to use. The full contents of the report can be viewed at http://www.kff.org/medicaid/upload/8380.pdf.