Foundation Survey Finds Slowdown in Medicaid Spending Increase

The growth in spending on Medicaid slowed considerably in the most recent fiscal year, reflecting both economic recovery and cutbacks by state governments, writes The New York Times.

A survey by the Kaiser Family Foundation found that state Medicaid spending for the year ending in June rose by 2 percent, compared to a 10 percent rise the prior fiscal year. Enrollment in Medicaid, which swelled during the recession as Americans lost jobs and private health insurance, grew by a relatively modest 3.2 percent in fiscal 2012.

At the same time, states trimmed their Medicaid budgets by freezing reimbursement rates for hospitals and doctors, cutting back on optional benefits such as dental and vision coverage, and shifting patients into managed-care programs.

The Kaiser study predicts a continued slowdown in this fiscal year, with Medicaid spending estimated to raise by 3.8 percent and enrollment by 2.7 percent, but the trajectory could change in 2014 when the national health-care law takes effect and expands the program to cover more low-income people.