State Medicaid spending swells even as enrollment flattens

States’ total Medicaid spending grew slightly in the fiscal year 2019, even though program enrollment fell off amid a strong economy with low unemployment, according to a survey of state Medicaid directors released Friday by the Kaiser Family Foundation. The report found that overall Medicaid spending growth fell to 2.9% in 2019 thanks to a drop off in enrollment, but state officials expect that number to climb back up to 6.2% in 2020. State Medicaid spending grew slower than total spending in 2019. That trend will probably continue in 2020 because of help from federal money and savings from provider taxes or other budget offsets.

Medicaid directors contend that growing prescription drug costs (especially specialty drugs), provider rate hikes and an aging population with increasing long-term care costs are driving total Medicaid spending.

Modern Healthcare