Healthcare & Medicaid

 

Healthcare & Medicaid

Key healthcare and Medicaid issues create enormous financial and policy challenges for states.  The rapid growth in healthcare costs continues to be a significant fiscal issue for states.  In fiscal 2011, it is estimated that Medicaid comprised 23.6 percent of total state expenditures. There are also many challenges ahead as states move forward with implementing national health care reform. 

Staff Contact: Stacey Mazer

NASBO Publications

  • Funding ongoing Medicaid programs is one of the greatest challenges for states. In governors’ proposed budgets for fiscal 2012, cost containment in Medicaid is a dominant theme. Medicaid spending is estimated at $354 billion in fiscal 2010, according to NASBO’s 2009 State Expenditure Report. As a result, Medicaid surpassed elementary and secondary education as the largest component of total state spending for the first time since 2006 based on estimated fi scal 2010 spending data.
  • This report finds that the recent improvement in the national economy has not translated to strong growth in total state spending. This is largely due to the fact that state revenues have not increased as fast as Recovery Act funds have declined, leading to a unique situation in which total state expenditure growth has slowed during the same time that the national economy has been improving.
  • Although state fiscal conditions continue their slow improvement in fiscal 2012, they are likely to remain constrained due to the lack of a strong national economic recovery and the withdrawal of Recovery Act funds. This slow improvement in state finances is highlighted by the 38 states that reported general fund spending growth in 2011 and the 43 states that reported spending growth for 2012. However, 29 states still have lower general fund spending in fiscal 2012 compared to the pre-recession levels of fiscal 2008.