States Move Ahead with Medicaid as Lawmakers Consider Reform

February 2018

HIDA Government Affairs Update

By Linda Rouse O'Neill
Vice President, Government Affairs

Leaders in the House of Representatives have expressed interest in entitlement reform this year. Changing Medicaid will likely be a key element of any entitlement reform effort, as the program comprises a large portion of federal spending. Since 2018 is an election year, it is unlikely entitlement reform legislation will advance, but it is important to be mindful of potential cuts.

In addition to potential cuts, many states will face new Medicaid budget pressures this year. Federal funds for states that expanded Medicaid under the Affordable Care Act are decreasing, even though enrollment and spending continue to grow.

Every year, HIDA publishes a comprehensive outlook on Medicaid. This month’s column highlights some of the key insights from our most recent update, factoring in the Trump Administration’s intentions to reform Medicaid, ongoing trends, and market implications.

State Medicaid spending accelerates in 2017

States’ Medicaid grew by 3.5 percent in FY 2017, up from 2.4 percent in FY 2016. The primary driver of this accelerated growth is an ACA provision that required states to pay 5 percent of enrollees’ costs in January 2017.

Managed care enrollment and spending grows in many states

States are increasingly using managed care organizations (MCOs) to provide care. As of March 2017, there were a total of 275 Medicaid MCOs in the U.S., with over 48.3 million enrollees nationwide. Between March 2016 and March 2017, 14 states experienced growth in MCO enrollment, while only six states experienced a decrease.

According to the Centers for Medicare and Medicaid Services, the provision of long-term care through MCOs is growing more rapidly than overall Medicaid long-term care spending. The cost of long-term care provided through MCOs rose by 24 percent in FY 2015 (the most recent available data) to $29 billion. This cost accounted for 18 percent of all long-term care spending.

Insurers continue to offer plans to nearly all U.S. consumers on ACA exchanges

While some counties struggled with the possibility of having no insurers on their marketplaces in 2018, ACA health plans will be sold in nearly every county in 2018. Based on the latest data, most of the 12 million people who obtained health insurance through the individual marketplaces will have the same number of insurers to choose from as they did last year.

These are just some of the insights contained in HIDA’s Medicaid 360: State-by-State Medicaid Report. In addition to an overview of national trends, the report details provider reimbursement changes in each state, and provides a granular look at Medicaid expenditures across the country. To learn more about this report, or other resources from HIDA Government Affairs, email