Putting Medicaid in the Larger Budget Context: An In-Depth Look at Four States in FY 2014 and 2015

Medicaid has long-played an important role in the US healthcare system, accounting for one in every six dollars of all US health care spending while providing health and long-term services and supports coverage to over 66 million low-income Americans. Medicaid also plays an important role in states budgets as both an expenditure item and the largest source of federal revenue for states.

The years 2014 and 2015 will stand out as a time of significant change and transformation for Medicaid programs. With the economy improving from the lingering effects of the Great Recession, Medicaid programs across the country were focused primarily on implementing a myriad of changes included in the Affordable Care Act (ACA), pursuing innovative delivery and payment system reforms to help assure access, improve quality and achieve budget certainty, and continuing to administer this increasingly complex program.

However, these changes to Medicaid policy, spending and enrollment take place in the larger context of states budgets. Unlike the Federal government, states generally have balanced budget requirements, taking into account the amount of revenue coming in from a state’s own resources as well as federal revenues. State lawmakers must balance competing priorities across budget expenditure categories. Even in years of economic growth, state lawmakers face this pressure of balancing priorities.

This report provides an in-depth examination of Medicaid program changes in the larger context of state budgets in four states:

These case studies build on findings from the 14th annual budget survey of Medicaid officials in all 50 states and the District of Columbia conducted by the Kaiser Commission on Medicaid and the Uninsured (KCMU) and Health Management Associates (HMA.) Additional research on budget activity, economic conditions, and other relevant health policy activity was conducted by KCMU and HMA staff members; each case study was submitted to states for their review and comment.


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