Medicaid and State Budget Cuts: It’s Complicated

As states try to balance budgets and social needs, blame is increasingly easy to be passed around. However, it is important to remember the people that are impacted by these budget cuts and the real life consequences of these changes.

Check out this story from NPR that breaks down the differences between Medicaid and Medicare, and sheds light on the driving costs of Medicaid: Click here.

From NPR:

“Medicaid provides health care to people with low incomes, who also meet certain other categories. And while the federal government pays more than half of the bill, the share the states pay consumes 22 percent of the average state’s budget. That’s more than they pay for education, transportation or other large budget items.”

The story highlights one of the problems with our current situation with Medicaid:

  • While 75% of Medicaid enrollees are children and eligible adults, they make up only 1/3 of the cost of Medicaid
  • Meanwhile 25% of Medicaid enrollees are the elderly, but they make up 2/3 of Medicaid spending

Many plans to pare down the costs of Medicaid focus on reducing eligibility to younger people, you can see the impact would be limited because they make up the minority portion of spending. To make a real impact , states could implement plans to better coordinate care for older adults, offer more preventative or supportive services to keep people healthy and out of the hospital, or work harder to prevent Medicaid fraud.


What are your thoughts to improve the current Medicaid budget situation? Leave your thoughts below.

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