Medicaid costs are growing slower than private health coverage

NE_Appleseed_Icons_Medicaid-128Medicaid is a critical program in Nebraska, providing access to health care for many people – mostly children, older adults, and people with disabilities.

Despite the important role that it plays in our state, some claim that Medicaid spending is growing at unsustainable rates. However, recent data shows that Medicaid costs have been well contained in Nebraska. According to the Kaiser Family Foundation, from 2010-2013, the average growth in Medicaid spending in Nebraska was just 2 percent. In fact, Average monthly cost per enrollee has actually decreased for adults since 2011.

It’s true that health care spending comprises a large part of state budgets. And it makes up a bigger share now than it has historically. However, part of the reason why Medicaid can a big budget item is that health care in general is expensive. And it was before the Affordable Care Act. Whether you have coverage through your job, bought a plan on the Health Insurance Marketplace, or are covered through Medicare or Medicaid, you know that getting care can be expensive. Even though Medicaid is a public insurance program, it can reflect trends in private coverage. Looking at the 2014 Nebraska Department of Health and Human Services’ Annual Medicaid Report, it becomes evident that costs are highest in Medicaid where they are similarly high in private insurance, such as for services like long-term care.

KFF Public vs Private insurance growthSo it makes sense that as health care costs generally continue to rise, Medicaid costs will also continue to rise. That said, Medicaid spending growth per enrollee is lower than that for private coverage. According to the Federal Office of the Actuary in the Department of Health and Human Services, the rate of increase in per capita spending for Medicaid and Medicare is lower than for private insurance. Spending on each enrollee is growing faster in private insurance than in Medicaid, where costs are more effectively contained.

Moreover, an October 2014 study points out that state Medicaid spending is growing more slowly in states that have expanded Medicaid as opposed to non-expansion states. Data from FY 2014 and 2015 shows that non-expansion states experienced smaller increases in enrollment than states that expanded eligibility, but, at the same time, experienced similar total and state spending growth.

In other words, states that didn’t expand Medicaid were covering fewer people but spending at rates comparable to states that had increased eligibility. Through Medicaid expansion, states can cover people in a more financially responsible way by drawing down federal funds to cover newly eligible individuals. As a state, we want to make smart choices with our budget, and these reasons, among others, demonstrate that expanding Medicaid is a financially smart decision.

  One Reply to “Medicaid costs are growing slower than private health coverage”

  1. Roxann Hamilton
    08/11/2015 at 6:59 pm

    Does anyone ever discuss, or understand, that the US has numerous government run health insurances Indian Health, Veterans Health, Medicare, Medicaid, I don’t understand the prejudice against Medicaid. There should be 1 centralized Federally run health care system for all Americans. It would be cheaper than having 4 or more federal health care services.

    Medicaid Expansion would let people like me work at a gainful salary relative to my profession and academic degrees/training. I am only allowed to earn about $160 – $180 per month or I will lose my secondary insurance (Medicaid) which helps keep me alive and have the ability to work!

    With several serious life threatening very expensive medical conditions (ie: heart disease, blood clot diseases, inoperable aneurysm monitoring, lung disease, pre-cancerous masses in colon and breast, diabetes and complications, TIAs, Angina….. and several more) , I could never afford insurance premiums and copays and the $4,500 a month in medications without Medicaid to help pay medical costs Medicare does not pay for (ie: partial deafness – hearing aids, periodontal disease – dental care, eye diseases – macular degeneration and glaucoma.)

    I want America to be strong: having healthcare, nutrition, shelter.

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