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Medicaid enrollment growth slows as spending rises

Spending rises as states that implemented Medicaid expansion started to pay 5 percent of the costs of those enrollees in January 2017.

Jeff Lagasse, Associate Editor

After a peak in enrollment and spending growth in 2015 due to the Affordable Care Act, Medicaid enrollment growth is slowing down, according to a new survey from the Kaiser Family Foundation.

Nationally, enrollment growth slowed to 2.7 percent in fiscal year 2017, and that growth is expected to dip further in fiscal year 2018, to about 1.5 percent. 

Spending, however, is likely to increase. While it remained relatively stable in fiscal 2017, at 3.9 percent compared to 3.5 percent in fiscal 2016, the current projection is that spending will increase by 5.2 percent in 2018.

[Also: Billions in proposed budget cuts to Medicare, Medicaid threaten provider compensation]

KKF surveyed Medicaid directors in all 50 states and the District of Columbia, and they largely attributed the spending increase to increases in payment rates for provider groups (minus inpatient hospitals) and the rising costs of prescription drugs and long-term care services.

State Medicaid spending saw a slight uptick from 2.4 percent in fiscal 2016 to 3.5 percent in fiscal 17, as states that implemented Medicaid expansion started to pay 5 percent of the costs of those enrollees in January 2017, midway through the state fiscal year. But state spending growth for Medicaid was slower than overall state general fund growth in fiscal 2017.

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Medicaid directors attributed the slower enrollment growth to a stable economy and states' processing of delayed eligibility redeterminations -- as well as the tapering off of enrollment due to the ACA.

Almost every state in the country is counting on Congress to reauthorize the Children's Health Insurance Program to avoid budget-related Medicaid woes, the survey found. As of now, though, the status of CHIP is uncertain. Congress missed the initial Sept. 30 deadline to renew federal funding for the program, and a more recent reauthorization measure is stalled due to partisan disagreements over how CHIP should be funded.

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States are also fretting over potential changes to disproportionate share hospital payments, which could cause additional budget challenges.

Twitter: @JELagasse
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