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From Health Law Daily, July 22, 2015

Mammoth Medicaid not going on diet anytime soon

By Mary Damitio, J.D.

Cautioning that projections of health care costs are “inherently uncertain,” the CMS Office of the Actuary is estimating that Medicaid enrollment and its associated costs will continue to rise significantly over the next 10 years along with the Patient Protection and Affordable Care Act’s (ACA) (P.L. 111-148) expansion of the program. The projections come as part of an actuarial report that examined Medicaid’s historical trends and provided 10-year enrollment and expenditure projections for the giant program, which represents one-sixth of the nation’s health economy (2014 Medicaid Actuarial Report, July 10, 2015).

2013 estimates. Medicaid is the largest health program in the country as measured by enrollment, with outlays of $457.8 billion in 2013 alone. Such outlays constituted a large portion of federal and state budgets and created a significant revenue source for health care providers and insurers. The program was a safety net for an average 59 million beneficiaries in 2013, and the report estimates that one in five individuals in the U.S. were enrolled in the program for at least a month in that year, which represented a 6.1 percent increase from the prior year.

The estimated spending per enrollee was $6,897 in 2013, with spending being the lowest for children and adults and the highest for the elderly and disabled. The report also estimated that per enrollee spending increased by 2.7 percent in 2013 from the previous year.

2014 estimates. Program expenditures for 2014 are estimated to have increased by 9.4 percent to $498.9 billion. That figure excludes spending on newly eligible enrollees, which was covered 100 percent by the federal government. As a result, the report estimates that the federal share of program expenditures increased by 60 percent in 2014. The report also estimated that average enrollment increased 9.6 percent to 64.6 million in 2014, with newly 4.3 million newly eligible adults enrolling in the program.

ACA impact. The impact of Section 2001 of the ACA, which expanded Medicaid eligibility, is likely to be felt for a number of years. The Actuary estimated that an average 12 million newly eligible individuals will be enrolled by 2023, with the total average enrollment reaching 78.8 million in that year. As a result, the costs to the federal government will continue to rise significantly as well. Spending solely on newly eligible adult enrollees is projected to be $457 billion from 2014 through 2023, which will be 7 percent of program spending over 10 years. Most of the increase is expected to be paid by the federal government, which would result in an 11 percent growth in federal Medicaid spending over the 10-year period.

MainStory: TopStory MedicaidNews CMSNews MedicaidPaymentNews EligibilityNews

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