April 5, 2019

'Tis the Season for Medicaid Myth-Busting: Medicaid Costs Are Not Exploding

This post was last updated on September 29, 2021. As new policies are announced, FPI will update this page.

As Florida’s response to COVID-19 takes front and center, concern grows for low-income families who struggle to take precautions against the spread of the virus. Although Congress has passed the Families First Coronavirus Response Act to address, at least in part,  the public health crisis and economic fallout from COVID-19, many barriers continue to keep struggling families from accessing the assistance they need during the pandemic. As Florida initiates policies implementing the Act and addressing other barriers to the safety net, FPI will update this form. When available, hyperlinks are provided to agency documents or statements that provide greater detail  about the new policy.

On March 22, 2020, FPI and 44 other organizations sent a letter to Governor DeSantis, leadership in the Legislature and agency heads to urge action on 47 specific policy changes to reduce unnecessary barriers for Florida’s safety net programs in response to the COVID-19 pandemic. See the letter here.

New studies recently highlighted by Georgetown research professors Edwin Park and Andy Schneider rebut common Medicaid-spending myths.

Research from the Office of the Actuary within federal Centers for Medicare and Medicaid Services pokes holes in the common refrain that Medicaid spending is out of control. Their data show that during 2017:

Overall growth in Medicaid spending slowed to 2.9 percent, down from 4.2 percent in 2016; and

Medicaid spending per beneficiary grew by only 0.9 percent, even slower than the 1.2 percent growth in 2016.

Florida numbers also show a downward trend. From 1991 to 2014, Florida Medicaid per-enrollee spending showed average annual growth of 2.4 percent, which is well below the national average of 3.0 percent and the 3.2 average among other southeastern states.

It’s also important to note that the overall rate of growth in Medicaid spending is slower than that in Medicare or private health insurance.

Another common refrain is that Medicaid consumes the largest share of state budgets. While this statement is true, it’s misleading. That’s because more than half of state Medicaid costs are paid for through federal funds. In Florida, 61 percent of Medicaid costs — $17.3 billion for Fiscal Year (FY) 2018-2019 — are covered this way.

An analysis by the National Association of State Budget Officers finds that for FY 2018, Florida percentages are nearly identical to the national average.

As the legislative session is now in full swing, it’s key that Medicaid policy and budget decisions are grounded in fact. The facts show that the Medicaid, which covers children, people with disabilities and seniors — Florida’s most vulnerable residents — continues to be a great investment and financial deal for Florida taxpayers.

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