Demand on Medicaid slows in 2012 as economy improves

BMJ 2012; 345 doi: (Published 26 October 2012) Cite this as: BMJ 2012;345:e7270
  1. Edward Davies
  1. 1BMJ, New York

Growth in total Medicaid spending and enrollment slowed substantially in 2012. The change has been credited to the slow improvement in the US economy and better control of costs. Relatively slow growth in spending and enrollment is expected to continue in 2013, concluded the 12th annual Medicaid budget survey by the Commission on Medicaid and the Uninsured of the Kaiser Family Foundation, a non-partisan foundation that focuses on healthcare issues.1

Total Medicaid spending rose by 2% on average across all 50 states in 2012, down from 9.7% growth in 2011. This is among the lowest rates of spending growth ever recorded (in 2006 spending grew by 1.3%).

“After several economically depressed years in which high demand for public programs and slumping tax revenue created intense pressure on state Medicaid programs, last year saw total Medicaid spending growth hit a near record low,” said Diane Rowland, executive vice president of the Kaiser Family Foundation and executive director of its Commission on Medicaid and the Uninsured. “Reining in costs remains the dominant theme, but the improving economy has offered states more leeway to move forward on delivery system reforms and implementation of the Affordable Care Act.”

The survey also found that 48 states implemented at least one new policy to control Medicaid costs in 2012, and 47 planned to do so in the coming year. The most commonly reported strategy to contain costs was provider rate restrictions (capping the amount that Medicaid would pay for a particular procedure). However, with some improvement in the economy some states were able to restore cuts or make targeted efforts to boost provider rates and benefits in 2013.


Cite this as: BMJ 2012;345:e7270