Medicaid spending remains flat

October 16, 2007

States look to expand Medicaid benefits and eligibility as the program enrollment and spending remain low.

State Medicaid spending will grow by only 2.9% in 2007 as declining enrollment and cost-control measures have reduced the burden on states, according to an analysis from the Kaiser Family Foundation. Spending is expected to rise by 6.3% in 2008, based on current state budgets. States attributed the low enrollment numbers to dual-eligible beneficiaries moving to Medicare Part D, new federal documentation requirements, and low unemployment. The slow growth in costs is also allowing states to look into expanding benefits, loosening eligibility requirements, and expanding long-term care services. For the first time since 2003, no state plans to cut a benefit in 2008. The study does not address the potential impact of the expected move to using average manufacturer price (AMP) for determining pharmacy reimbursement.

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