April 5, 2019

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

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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