Growth in the number of registrations and expenses in Medicaid: 2018 and 2019

A stronger economy was the main factor behind the declining growth in the number of Medicaid registrations and relatively stable spending growth at the time the states closed the deal. Fiscal year 2018 and adopted the budgets for the 2019 fiscal year. This summary analyzes Medicaid enrollment and expenditure trends for the 2018 and 2019 fiscal years based on: interviews and data provided by the Medicaid State Directors in the context of the 18th Annual Survey of Medicaid Directors in all 50 states and the District of Columbia. The methodology used to calculate enrollment and expense growth as well as additional information on Medicaid funding is available at the end of the document. The main conclusions are described below and in a supplementary report.

NEW: An Annual Survey of 50 States of Medicaid Directors Finds Stable Listings, Linked to a Stronger Economy and New Eligibility Systems

Registration: A stronger economy, the elimination of delays of redetermination in States that had previously introduced new or improved eligibility systems, and improved data matching and verification in a number of States resulted in uniform growth in the workforce for 2018 (-0.6%) and expected for 2019 (0.9%) (Figure 1). Since the peak reached in fiscal 2015, growth in the number of listings has continued to slow, partly due to the gradual decline in growth in the number of registrations. TO THAT.

Medicaid survey in 50 states shows average spending growth is higher than enrollment due to pressure from rising prescription drug costs and long-term services and supports

expenses: Compared to fiscal 2017, growth in total expenses remained stable over the 2018 fiscal year (4.2%), but should accelerate moderately during the fiscal year. 2019 (5.3%). While slower growth in the number of cases has helped to dampen spending growth in fiscal years 2018 and 2019, higher costs for prescription drugs, long-term services and supports, and Behavioral health, as well as policy decisions to implement targeted increases in provider rates, were cited Medicaid Expenses.

ACA Expansion Funding: After receiving a 100% federal counterpart rate for the expansion group for the 2014-2016 fiscal years, states began paying 5% of the costs of the Medicaid Expansion Group of Affordable Care Act (ACA) from January 2017 and 6% from January 2018. the decrease in the federal counterpart for the expansion group (which will continue to decline steadily up to 90% d & # 39; by 2020) resulted in growth in state spending exceeding total expenditure growth (4.9% vs. 4.2%) in fiscal year 2018, the first full year of the year. Indicating state were required to pay part of the costs of expansion. However, states expect growth in total spending to grow faster than spending in FY 2019. While most states said they have financed the share of the costs of expansion assumed by the government. 39 State through general funds, a number of states have listed other sources of funding, including new or increased providers. taxes / fees or savings arising from the expansion.

In the future, the economic conditions and results of federal and regional elections will likely have implications for Medicaid policy development, spending and registration trends. Potential federal efforts to further modify the ACA or cap funding for Medicaid, as well as state voting initiatives and other efforts by states to adopt Medicaid extension are key topics to monitor.

The context

Medicaid covered about one in five Americans, or about 73 million people, in June 2018. Medicaid's total expenditures were $ 557 billion for fiscal 2017, of which 62 percent was government-sponsored. federal and 38% by the state. Medicaid accounts for one in six dollars spent in the health system, but more than 50% of long-term care expenditures. The major factors influencing total spending and enrollment trends in Medicaid over the last decade include the lingering effects of the Great Recession, followed by the implementation of the Affordable Care Act. . As of September 2018, 34 states, including DC, had adopted the ACA Medicaid extension, with implementation in Virginia scheduled for Jan. 1, 2019, and implementation in Maine, scheduled for release. fiscal year 2019 (the exact date had to be determined).

By the end of fiscal 2018, states were still improving over previous years. The unemployment rate continued to fall to 3.7% in September 2018, easing the growth in the number of Medicaid registrations. The recipes were strong in the 4^th quarter of 2017 (midway through fiscal 2018), up 9.3% from the same quarter last year (see Chart 2). This increase is largely due to the acceleration of personal income tax payments and local taxes on personal income, as individuals seek to take advantage of state tax deductions and personal income taxes. local governments that were subject to a cap as of January 2018 (due to the adoption of tax cuts and jobs). Law (TCJA) in December 2017). Data from the National Association of State Budget Officials (NASBO) indicates an estimated growth in state revenues of 4.9% for fiscal year 2018, with recoveries equal to or greater than initial budget projections in 39 states and 5 percent or more in 15 states.

For most states, revenue growth through fiscal year 2019 is expected to be more moderate than in 2018. Most of the budgets adopted reflect moderate growth in government revenues and expenditures. Although complete data are not available, the budgets proposed by the governors for the 2019 fiscal year proposed on average an increase in the nominal revenues of the general fund of 2.1% and expenditures of 3.2%. The new spending allocations in the budgets adopted for the 2019 financial year have often been geared towards primary and secondary education (including teacher remuneration). Other key priorities in the states include expanding post-secondary education opportunities, controlling health care costs, addressing infrastructure challenges, reforming prison systems, and focusing on the crisis. opioids.

The economy was still lagging in 2018 and 2019 in some states. National trends vary considerably from one State to another, as a number of States still face economic and / or budgetary problems. For example, Alaska, West Virginia, Louisiana and Mississippi had the highest unemployment rates in August 2018, exceeding the national rate by one percentage point or more. According to NASBO, seven states estimated their growth to be zero or negative in fiscal year 2018 and 10 states expected similar growth rates for 2019 when the governor's budget was released; Eleven states estimated zero or negative growth in general fund expenditures in fiscal year 2018, and another eight provided for similar growth in expenditures in fiscal year 2019 when the governor's budget was released.

Main conclusions

Trends in enrollment growth for fiscal years 2018 and 2019

The growth in the number of Medicaid registrations remained stable during the 2018 and 2019 fiscal years. Historically, Medicaid enrollment drives Medicaid spending growth, and enrollment increases in times of economic downturn and in response to major policy changes. The strong growth recorded during fiscal year 2015 largely explains by the implementation of the ACA, while the trends of the following years reflect the gradual decline in listings related to the ACA. 39; ACA and the improvement of the economic situation. During fiscal year 2018, overall growth in the number of listings declined slightly (-0.6%). Similarly, states expect a relatively stable 0.9% growth in listings for the same year (Figure 3).

In addition to the economy and the findings reported last year, a number of states that previously had new or improved eligibility systems reported having eliminated delays in new decisions and arrears, which also contributed to slower, uniform or declining growth in the number of registrations. In addition, some States reported that upgraded systems allowed for better verification of registration data, which led to additional downward pressure on enrollment. Some states reporting positive enrollment growth indicated that overall population growth was a contributing factor to the growth in school enrollment. About half of the states (27 states) reported a decline in enrollments for the 2018 fiscal year and 10 states reported decreases for the 2019 fiscal year.

Compared with other groups, growing adults had the highest median growth rate in 2018 and 2019, followed by the median growth rate of seniors and persons with disabilities. In contrast, many states reported slow or negative growth for non-expansion children and adult adults in fiscal years 2018 and 2019. Lower growth in school enrollment for both children and adults ( lower cost populations) compared to older people and people with disabilities (more expensive groups) changes the case mix of the overall Medicaid population with implications for expenditure growth.

Trends in Expense Growth for 2018 and 2019

Medicaid's total spending growth was relatively stable in fiscal 2018 and 2019. The high rates of growth in the number of listings, related primarily to the Great Recession and then to the implementation of ACA, were the main drivers of Medicaid's total spending growth at the end of the year. during the last decade. Compared to fiscal 2017, Medicaid's total spending growth remained stable at 4.2% during fiscal 2018, but is expected to accelerate moderately to reach 5.3% over the course of the year. of the 2019 fiscal year. Medicaid state directors noted that a slower growth in the number of registrations driven by an improvement in the economy, a low rate of joblessness and care. Management and other cost containment measures have contributed to curbing Medicaid's spending growth.

Medicaid officials have identified the rising costs of prescription drugs (especially specialty drugs), long-term services and supports, and behavioral health services, as well as policy decisions to increase payment rates Specific service provider groups Some states reported that enrollment growth, or particular groups, was a factor of expenditure, sometimes citing expanding adults or high-cost populations. Other states have noted that medical inflation, which tends to be greater than general inflation, pushed Medicaid spending growth to a level higher than that of other programs. Asked about trends in spending per member, about one in four states that per-member costs for seniors and persons with disabilities are increasing faster than for other groups, potentially amplifying the underlying changes in the case mix. of the entire population of Medicaid.

Total expenditures and the government's share of Medicaid expenditures increase at the same time, unless the federal counterparty rate changes. As a result of ACA's implementation, the enrollment of millions of expansive adults at a 100% federal matching rate resulted in growth overall expenditure lower than that of total expenditure. In the middle of fiscal 2017, expanding states began paying 5% of the new group's costs. This amount increased to 6% in January 2018. FY 2018 was therefore the first full year of the state to assume the cost of a share of the Medicaid expansion. As a result, the Medicaid government's spending growth slightly exceeded that of its total expenditures in fiscal year 2018 (4.9% growth in state expenditures, compared to 4.2% in total). While the states will start paying 7% of the expansion group's costs in January 2019, Medicaid's total spending growth is expected to exceed that of state spending (5.3% of total spending). against 3.5%) (Figure 4). ).

Growth in government spending for Medicaid generally exceeds that of the state's general funds, as medical costs have always risen faster than inflation. In the first three years of ACA's implementation (2014-2016), however, state spending on Medicaid grew more slowly than overall growth in the state's overall fund. because of the improved federal matching rate for growing adults. In fiscal 2017 and 2018, the historical trend has resumed with average growth in general fund expenditures of 3.0% and 3.4%, respectively, slightly lower than the Medicaid government spending of 3% and 3.4%, respectively. , 6% and 4.9%.

While most states reported financing their share of expansion costs with general funds, a number of states listed other sources of funding, including new or increased supplier fees / taxes or savings. realized because of the expansion. Some states have mentioned other sources of funding, including local public funds in Illinois, cigarette taxes in Indiana, discount increases on drugs in Kentucky and the " other income "in New Hampshire. Several developing states have reported multiple sources of funding (Exhibit 1).

	Number of states	States
Fee / fee of the new provider	5	AZ, LA, OR, PA, VA
Increase of existing vendor tax / tax	7	AR, CO, IL, IN, MI, OR, PA
Savings from the Expansion of Medicaid *	7	CA, DE, MI, MT, NH, NY, PA
General State Fund	28	AK, AR, CA, CT, DC, DE, HI, IA, IL, KY, MA, MD, MI, MN, MT, ND, NJ, NM, NV, NY, OH, OR, PA, RI, VT, WA, WV
Other ^	4	IL, IN, KY, NH
* States reported funding the non-federal portion with savings from Medicaid's expansion in a number of areas, including correctional services, mental health and population transition previously funded by the state. to the expansion group. ^ "Other" entries refer to local government funds in IL, taxes on cigarettes in IN, rebate increases on drugs in KY and "other income" in NH.

conclusion and perspectives

The states began fiscal year 2019, boosted by the strong revenue growth recorded in fiscal year 2018 and projected a steady growth in revenues and expenses for fiscal year 2019 A stronger economy contributed to stagnant enrollment growth, which in turn dampened Medicaid's spending growth. However, rising costs for prescription drugs and long-term services and supports, as well as targeted increases in provider rates and inflation in medical care were cited as factors contributing to expenditure growth. In the future, the federal and regional elections of November 2018 will likely have important implications for Medicaid. The result of federal elections could determine whether Congress passes legislation to make other changes to the ACA or to reform and cap Medicaid funding. Governor elections and state-level legislative elections could have consequences for states considering Medicaid extension or Article 1115 demonstration exemptions. Thirty-six states have held governor elections This year and three states (Idaho, Nebraska and Utah) have launched voting initiatives for the recent adoption of the ACA Medicaid expansion. The year 2019 will be a year to observe the changing role of Medicaid on the ground in the 50 states and developing countries.