Medicaid Enrollment and Spending Growth
October 29, 2015
Medicaid enrollment is countercyclical. During economic downturns more people qualify to enroll in Medicaid, which in turn drives increases in spending.
In FY 2015, the first full year of implementation of the major Affordable Care Act (ACA) coverage expansions, Medicaid enrollment increased on average by 13.8% throughout all 50 states and DC. That same year total Medicaid spending increased by 13.9% on average.
- States that chose to expand Medicaid (29 states) reported Medicaid enrollment and total spending growth nearly three times the rate of non-expansion states.
- In those states enrollment increased by about 18% and total spending increased by 17.7%.
- Across the 22 states not implementing the Medicaid expansion, enrollment and total spending were much slower.
- Beyond enrollment, other drivers of increases in spending are provider rate increases and the higher cost of health care, including prescription drugs.
As a result of the federally funded expansion of Medicaid, state spending across all states increased only 4.5% in FY 2015, compared to total Medicaid spending growth across all states of 13.9%.
Downward pressure in enrollment and spending as a result of the improving economy were outweighed by the ACA coverage policy changes. However for, FY 2016 total enrollment and spending growth are projected to slow.
States will continue monitoring how the ACA provisions are affecting Medicaid enrollment and spending, and other areas of the state budget. Many states are also engaged in major payment and delivery system reform efforts that have implications for program performance and spending as well as the health care of millions of beneficiaries.
Source: Robin Rudowitz et al., "Medicaid Enrollment & Spending Growth: FY 2015 & 2016," Kaiser Family Foundation, October 15, 2015.
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