Friday, June 20, 2008

Medicaid Spending Skyrocketing 

States still looking to spend more

By Marc Kilmer

Filed As:  Health Care

Those of us who study Medicaid spending know that it has a tendency to grow pretty quickly, especially during an economic downturn. As if we needed more proof of that, the Kaiser Daily Health Briefing notes a new study has been published showing that Medicaid is growing faster than other areas of state spending: 

The survey found that Medicaid spending accounts for 21.1% of state spending, making it "the single largest portion of total state spending." Medicaid spending in FY 2009 is expected to grow by 4.4%. Scott Pattison, executive director of the state budget officers association, said that Medicaid spending in recent years has grown at a faster rate than the general funds. Spending for the program in FY 2008 grew 6.3%. Pattison said, "There has to be an expansion of revenue in terms of either tax increases, which tend to be politically rare, or further disproportionate cuts outside of K-12 (education) and Medicaid".

But states aren't letting little fiscal responsibility get in the way of more government spending on health care:

The survey also found that despite the economic downturn, states and governors are still working to overhaul state health care systems. The report states, "It is clear that covering the uninsured is a high priority across many state governments, and many of the proposals have come from governors of both parties." About two-thirds of all states have proposed measures to their budgets to expand coverage, 18 of which already have enacted or implemented the measures, and 26 that have introduced proposals in their FY 2009 budgets.

When Maryland legislators were considering expanding the state's Medicaid program during a special session called to address the budget deficit, I explained why increasing spending on this program, especially in light of a deficit, is a plan for fiscal disaster. My views fell on deaf ears. It sounds like other states' legislators have ignored fiscal reality, too.

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