Report: FY 2012 Medicaid Spending At or Below Most Projections

State Medicaid spending and enrollment for fiscal year 2012 is at or below projections from the beginning of the year, according to a mid-year survey released on Thursday by the Kaiser Family Foundation.
by | February 9, 2012

State Medicaid spending and enrollment for fiscal year 2012 is at or below initial projections in most states, according to a mid-year report released Thursday by the Kaiser Commission on Medicaid and the Uninsured.

On average, state Medicaid officials expected an increase of 2.2 percent in spending, one of the lowest rates in recent memory, at the onset of 2012, according to the report. More than half said that the possibility of a budget shortfall was at least 50-50. But based on surveys conducted by the commission during December and January, the outlook appears to be improving. A total of 23 states project that 2012 spending is about the same as expected at the beginning of the year. Another 13 report that their spending has been lower than anticipated.

Medicaid enrollment is following a similar trend. It was expected to grow by 4.1 percent on average this year, according to the survey, down from 5.5. percent in 2011 and 7.2 percent in 2010. According to the survey, 24 states expect enrollment to match initial projections and 19 report that it should be below initial expectations.

The report attributes the gradual but persistent economic recovery with these findings. It notes that the unemployment rate from the Bureau of Labor Statistics, which peaked at 10 percent in October 2009, had fallen to 8.3 percent in January 2012. State tax revenues have also improved after seven consecutive quarters of growth and are returning to pre-recession levels in some states, according to the report.

Despite a generally improved outlook, 10 states (California, Colorado, Louisiana, Maine, Maryland, North Carolina, Pennsylvania, Tennessee, Washington and West Virginia) are still planning to make cuts before the end of the fiscal year. Because the Affordable Care Act prevents states from reducing Medicaid enrollment to address shortfalls, states are looking at reduced benefits and lower payments to providers to fill those gaps, according to the report.

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