Medicaid Big Threat to States

A new study by the State Budget Crisis Task Force found Medicaid is one of the six biggest threats facing states. That should be no surprise to our readers. In Pennsylvania, Medicaid spending has grown faster than the economy, taxpayers’ income and state budget revenue.

The Affordable Care Act makes this bad situation desperate. Nationally, Medicaid costs will grow by an estimated 6.6 percent until 2020, but if states approve the ACA Medicaid expansion, costs will grow by 8.1 percent.

Pennsylvania recently took steps to control Medicaid costs, but the only way to reduce costs and improve care is regulatory flexibility from the federal government. Without flexibility, the study finds the gap between Medicaid spending and state tax revenue growth for all 50 states will grow to $22 billion per year within five years.