State Spending on Medicaid Will Increase 28.7 Percent

The expiration of federal stimulus funding is forcing states to pay more toward Medicaid. In response, most states are making cuts to the program.
by | October 27, 2011

State spending on Medicaid is expected to increase by 28.7 percent in fiscal year 2012, according to the 11th annual survey of state Medicaid officers by the Kaiser Family Foundation's Commission on Medicaid and the Uninsured.

Although overall state Medicaid spending is projected to rise by 2.2 percent, states must shoulder a bigger chunk of that total after enhanced federal support under the American Recovery and Reinvestment Act expired in July.

Reductions in payments to providers seems to be states' primary means of coping with these new financial realities, the survey found, as 46 states planned reduced payments to at least some providers. Hospitals will feel the biggest impact, facing reductions in 40 states, and nursing home payments are planned to be cut in 31 states.

Almost every state, 48 in total, is also taxing at least some of their providers. Hospitals have been a consistent target; 23 states had Medicaid taxes for hospitals in 2009; 39 do in 2012.

Medicaid beneficiaries are also being asked to take on a bigger share of their costs. A sizable minority of 14 states, up from five in 2011, imposed new or higher co-payments for their Medicaid population.


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