MEDICAID COSTS AND CUTS.
The main purpose of this paper was to identify the problems associated with increasing costs of Medicaid expenditures in the United States. Medicaid spending usually takes up a significant proportion of the state budgets. The problem statement aimed at analyzing how the Medicaid program reached to its present condition?
The decline on the state revenue and an increase on the enrollment rates are imposing significant burdens on the government budgets; how can we address the problem without jeopardizing the goals of the program? It was established that the increasing Medicaid costs are mainly due to increasing individuals enrolling for the program, increase in the provider payments and an overall increase in healthcare prices in the United States. The complexity of the problem of the Medicaid costs in the US is worsened by the decreasing state revenue. The possible solutions identified in the paper included cutting the Medicaid costs, raising the taxes and using reforms in the Medicaid program. The paper justified the use of Medicaid reforms as an effective solution for addressing the challenges of rising Medicaid costs.
Problem statement
Medicaid costs are increasingly taking a relatively larger share of the federal and state budgets in the nation. With the decline in the state and federal revenue, the Medicaid costs for a single enrollee have been on the increase over a last decade. The National Governors Association referred to the rising Medicaid expenditures as a fiscal crisis in the states (Galewitz, 2010). From a nationwide perspective, Medicaid and other healthcare services take up 30 percent of the state budgets, which is resulting an extreme strain on the state budgets. An increase in the Medicaid costs poses significant shortfalls in the Medicaid expenditure at the state level. Without the implementation of effective reforms, Medicaid costs are threatening to consume a greater share of the budgets adopted by the states, which in turn may affect other items in the budgets. It is projected that in 20 years, Medicaid has the potential of putting the states to bankruptcy (Cutler & Mark, 2000). The problem with Medicaid expenditure at the state level is worsened by the effects of the recent recession on the revenues of the states, which are relatively lower compared to the pre-recession levels. A notable trend is the increasing fiscal pressure on the Medicaid costs and the increasing number of enrollees for the program and cases of dual eligibility are exerting significant pressure on the Medicaid costs (Hadley, 2003). This largely attributed to the ongoing challenge associated with the expansion of the Medicaid program since its introduction, increasing the burden on the state and federal budgets due to the fact that Medicaid costs are increasing amid declines in the revenue levels of the states, forcing the state governments to reduce the expenditure on Medicaid. This implies that the adequate policy response to the issues and challenges associated with Medicaid costs requires a comprehensive review of the problem. How did the Medicaid program reach to its present condition? The decline on the state revenue and an increase on the enrollment rates are imposing significant burdens on the government budgets; how can we address the problem without jeopardizing the goals of the program?
Literature Review
