2012 Shows a Slower Medicaid Spending Increase

According to the results of a recently released study, published annually by the Kaiser Family Foundation, the growth in Medicaid spending reached “near record low[s]” in 2012.

The massive government program that provides medical coverage to millions of impoverished and disabled Americans has a reputation for devouring state budgets, but the damage may be lessening for the time being.

Even though there may be some disparities between states, the total amount of money spent on Medicaid, when averaged across all 50 states, increased by just 2 percent in 2012; the year before, spending increased by 9.7 percent. According to Kaiser analysts the 2012 increase was “among the lowest rates of spending growth ever recorded,” with 2006 having an increase in spending of only 1.3 percent.

Many states, including Ohio, estimate that the decrease in spending is due to improvements in the economy, which helped to ease the growth in enrollment. This decrease in enrollment, combined with continued efforts by the states to reduce costs, is the likely impetus behind the decreased spending. Examples of states’ efforts to reduce costs include reducing the rates which are paid to physicians and other healthcare providers, as well as the expanded use of managed care, care coordination for people suffering from chronic illness and expanded home health care services.

As for enrollment rates, the amount of people enrolling in Medicaid, nationwide, grew by 3.2 percent this year, which is a 1.2 percent decrease from last year.