Growth in total Medicaid spending and enrollment slowed substantially in fiscal year 2012 as the economy began to improve and states worked to control costs. Relatively slow growth in spending and enrollment is expected to continue in fiscal year 2013, according to a Medicaid budget survey by the Kaiser Family Foundation. Total Medicaid spending increased 2% in fiscal year 2012, down from 9.7% in fiscal year 2011. It’s among the lowest rates of spending growth ever recorded. A slowly improving economy helped moderate growth in Medicaid enrollment, which grew at an average 3.2% rate across states, down from 4.4% a year earlier.
For fiscal year 2013, states expect Medicaid enrollment to grow at an even slower rate at 2.7%. Legislatures have authorized total Medicaid spending growth including state and federal shares of 3.8% fiscal year 2013. State-only Medicaid spending is expected to grow 2.3% in fiscal year 2013, slower than total Medicaid spending growth and much slower than in fiscal year 2012 when states confronted the end of the enhanced federal funds under ARRA.
Curbing costs remains a strong focus. In fiscal year 2012, 48 states implemented at least one new policy to control Medicaid costs, and 47 planned to do so in fiscal year 2013. The most common cost containment strategy is to restrict provider rates. However, with some improvement in the economy, some states have been able to reverse cuts or work toward boosting provider rates and benefits in fiscal year 2013. States are expanding community-based long-term care through traditional programs and through new options in the Affordable Care Act (ACA). For more information, visit www.kff.org.
