Policy changes introduced by the Affordable Care Act in fiscal year 2014 have driven Medicaid enrollment and spending growth.
A recent study by the Kaiser Family Foundation revealed major trends in Medicaid enrollment and spending in state FY 2015 and state FY 2016. The report is based on interviews and data from state Medicaid directors as part of the 15th annual survey of Medicaid directors in all 50 states and the District of Columbia.
Here are four things to know about Medicaid enrollment and spending growth, based on the report.
1. Medicaid enrollment and spending significantly increased in FY 2015. Medicaid enrollment increased by an average of 13.8 percent in FY 2015 across all 50 states and Washington, D.C. The increase in enrollment caused Medicaid spending to rise by an average of 13.9 percent during the time period. Other key drivers of the rise in spending were provider rate increases and the high cost of healthcare, including prescription drugs.
2. Medicaid enrollment and spending growth in expansion states surpassed growth in non-expansion states. Three additional states — New Hampshire, Pennsylvania and Indiana — expanded Medicaid in FY 2015, making a total of 29 states that have done so. Among expansion states, enrollment increased by 18 percent on average and total spending increased by 17.7 percent on average. In non-expansion states, enrollment growth was 5.1 percent and total spending growth was 6.1 percent.
3. Despite variation in expansion and non-expansion states, state general fund Medicaid spending across all states grew at more modest levels than total Medicaid spending and enrollment growth. In expansion states, state general fund Medicaid spending increased at more modest levels compared to total Medicaid spending. State Medicaid spending mildly outpaced total Medicaid spending growth in non-expansion states. Among all states, state general fund Medicaid spending grew at 4.5 percent, while overall general fund growth increased at 4.6 percent.
4. Total Medicaid enrollment and spending growth is expected to slow in FY 2016. Predictions for FY 2016 Medicaid enrollment and spending growth — 4 percent for enrollment and 6.9 percent for spending — point to slower growth than in FY 2015. The difference in enrollment and spending between expansion states and non-expansion states is expected to narrow in FY 2016.