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Increasing Medicaid Costs Hinder States' Economic Recovery

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Increasing Medicaid Costs Hinder States' Economic Recovery

June 14, 2012

The National Governors Association and the National Association of State Budget Officers have issued a report, The Fiscal Survey of States, which details the burden Medicaid costs place on states' budgets. Although the rate of state spending on Medicaid has slowed in recent years, states still face the challenge of higher unemployment rates, which causes more uninsured people to turn to Medicaid.

The growth in Medicaid spending is expected to outpace the growth of other fund expenditures, as it has for the past decade. This leaves states looking for ways to cut costs, which often results in cuts to services and provider rate reductions.

The report discusses long-term strategies states are formulating, including expanding managed care and measures to prevent fraud and waste.