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Medicaid spending soars again

Patient Access Weekly Advisor, USA Today, October 10, 2007

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Medicaid costs jumped up 10.7% during the first six months of the year, according to a USA Today analysis of Bureau of Economic Analysis data. The increase is the biggest since 2001.

The spike in Medicaid spending may signal the end of a two-year span when costs seemed to be lowering. Costs grew 5.1% in 2005 and declined 1.7% in 2006, USA Today reports.

Increased Medicaid spending could strain state finances at a time when the falling housing market is slowing states' revenue growth, USA Today says. State tax collections have increased approximately 5% this year, down from 9% growth in 2005, according to Bureau of Economic Analysis data.

Medicaid and the Children's Health Insurance Program are health insurance plans for the poor, run by the state. 43% of the cost is covered by the state, with the rest paid for by the government. Medicaid pays nursing home costs for seniors who have exhausted their savings. USA Today reports it will cost about $440 billion this year.

To read the article in USA Today, click here.

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