Reports Show Medicaid Struggles Will Grow with Expansion of Program Under Obamacare

June 13, 2012

The National Governors Association this week released a report, “The Fiscal Survey of States,” that provides an update on the challenges currently facing the state-based Medicaid program. The report coincides with new information on the National Health Expenditures data that revealed the problem will only worsen under Obamacare.

According to NGA’s report:

  • ”Medicaid is the single largest portion of total state spending, estimated to account for 24 percent in fiscal 2011…”
  • ”State spending on Medicaid increased by 20 percent in fiscal 2012 (following a 23 percent increase in fiscal 2011)…”
  • ”States will continue to face significant fiscal challenges with Medicaid continuing to outpace overall general fund expenditures.”

According to the Obama administration’s own actuaries:

  • Under the health care law, 29.6 million more Americans will be dependent on the government-run Medicaid program by 2021.
  • As a result of the health care law, the growth rate of Medicaid spending will triple in 2014 (the year of implementation). 
  • As a result of the health care law, government-run Medicaid spending will grow at more than twice the rate of private health care coverage spending.

As burdensome as these challenges facing the states appear now, once the Medicaid expansion begins in 2014, states will be on the hook for at least another $118 billion in state spending.

Under the president’s FY 2013 Budget, Medicaid spending, as a percentage of the total U.S. economy, will grow by 37 percent over the next 10 years. 

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