by
Barbara Kram, Editor | October 22, 2008
Medicaid spending
growth rate is near
that of Medicare
Under current law, spending on Medicaid is expected to substantially outpace the rate of growth in the U.S. economy over the next decade, according to a new annual report released today by the Centers for Medicare & Medicaid Services (CMS).
The report projects that Medicaid benefits spending will increase 7.3 percent from 2007 to 2008, reaching $339 billion and will grow at an annual average rate of 7.9 percent over the next 10 years, reaching $674 billion by 2017. That compares to a projected rate of growth of 4.8 percent in the general economy.
HHS Secretary Mike Leavitt presented the report today at the fall meeting of the National Association of State Budget Officers (NASBO).
"This report should serve as an urgent reminder that the current path of Medicaid spending is unsustainable for both federal and state governments. We must act quickly to keep state Medicaid programs fiscally sound," Secretary Leavitt said. "If nothing is done to rein in these costs, access to health care for the nation's most vulnerable citizens could be threatened."
Although the CMS Office of the Actuary regularly produces 75-year projections of Medicare expenditures for the annual report of the Medicare Board of Trustees, the report released today is the first annual fiscal report on Medicaid.
The Medicare Trustees Report provides detailed information on the past and estimated future financial operations of the Hospital Insurance and Supplementary Medical Insurance Trust Funds. This new annual report on Medicaid contains analysis of past program trends and projections of Medicaid expenditures and enrollment for the next 10 years only. Future reports will expand on content to include longer-range projections and more extensive analysis.
Medicaid is a federal/state partnership program that provides health care to certain low-income people and is one of the largest payers for health care in the United States. For both federal and state governments, Medicaid is the largest source of general revenue spending on health services. Notably, Medicaid is the largest source of general revenue spending for health care for both the Federal government and the states.
This growth rate compares to spending projections for Medicare of 7.4 percent per year through 2017. Medicaid benefits spending over the next 10 years is projected to be $4.9 trillion. These amounts are in addition to that spent by federal and state governments on the State Children's Health Insurance Program (SCHIP).
