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State Budget Crisis Task Force cites Medicaid as major area affecting states’ fiscal stability

Posted on July 19, 2012 | No Comments

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The State Budget Crisis Task Force recently released a report identifying Medicaid growth as one of six major areas affecting states’ fiscal stability. The others include federal deficit reduction efforts, underfunded retirement commitments, narrow and eroding tax bases, local governments’ fiscal problems, and state laws. The report cited increasing enrollments, escalating health care costs, and difficulty implementing cost reduction proposals as reasons for Medicaid’s rapid cost growth. The State Budget Crisis Task Force report also noted that Medicaid recently passed k-12 education as the largest area of state spending when all funds are considered. The report cites the Centers for Medicare & Medicaid Services (CMS), which found that Medicaid costs will likely grow at an average annual rate of 8.1 percent between 2012 and 2020 if the Affordable Care Act (ACA) reforms are implemented and at a rate of 6.6 percent if they are not. The U.S. Supreme Court upheld the ACA’s Medicaid expansion provision but made it optional for the states.

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