While Senate GOP efforts to repeal and replace the ACA may have failed last month, states are continuing to pursue Medicaid changes on their own, according to a Fitch Ratings report.
Some states have already applied for Medicaid waivers from the federal government. Arkansas, Indiana and Kentucky are asking CMS to add work requirements to their Medicaid expansions, while other states, including Arizona, Maine, Pennsylvania and Wisconsin, are considering asking CMS to add work requirements for at least some traditional Medicaid enrollees also, according to Fitch. The ratings agency notes President Donald Trump's administration has suggested it is in favor of these types of measures.
Overall, Fitch said states have indicated their proposed Medicaid changes could reduce costs and also "support key policy goals."
"However, the actual amount of cost savings could be low as some health policy experts have raised questions about the efficacy of such work requirements given characteristics of the current Medicaid population. Adding work requirements could also add to state administrative burdens for oversight of the Medicaid program," the agency said.
Fitch also projects states will continue to focus on controlling Medicaid spending as they look at their budgets. The agency said CMS projects states will spend more on Medicaid in the long term due to growth in higher-cost traditional Medicaid-eligible populations.
The most recent 10-year forecast for CMS' National Health Expenditures suggests state and local government Medicaid spending will increase by an average of 6.1 percent annually between 2017 and 2025.
This growth rate "is far ahead of Fitch's expectations for national economic growth and state tax revenue growth, signaling continued pressure on states to manage their budgets accordingly," Fitch said.
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