ACA drives increase in Medicaid spending

As a result of policy changes introduced by the Affordable Care Act, growth and spending in the Medicaid program has greatly increased, according to a new report from the Kaiser Family Foundation.

In its 15th annual report, the Kaiser Commission on Medicaid and the Uninsured contracted with the Health Management Associates to survey Medicaid doctors and staff in all 50 states as well as the District of Columbia in order to identify and keep track of trends in Medicaid spending, enrollment and policy. Under the ACA, all states were required to implement enrollment changes including new streamlined application, enrollment and renewal processes for individuals.

The report reveals that Medicaid enrollment and spending increased substantially during 2015, the first full year that the major ACA policy changes took effect, with both rising an average of 14 percent.

And in the 29 states that expanded Medicaid, enrollment increased 18 percent, while Medicaid spending shot up by 17.7 percent. Part of the reason for the greated spending also can be traced to provider rate increases and the high cost of prescription drugs, the report adds. 

Medicaid expansion is also one of the driving forces behind decreases in the number of uninsured Americans, FierceHealthPayer has reported. Yet it also has been a strain on some state budgets.

States are also doing their best to implement alternative delivery systems and find a way to balance care so that more seniors can live at home, an accompanying report notes. Thirty-seven states "seek to control costs, reward quality and encourage integrated care," and 46 states took steps to expand healthcare options in the home.

Despite this year's Medicaid spending growth, experts project that things will slow a bit in FY 2016,  according to the report. The new focus will shift to states monitoring the effects of this year's spending on payment and delivery system reform.

To learn more:
- read the first report
- here's the other report