CMS releases Medicaid spending report: 10 things to know

Federal and state Medicaid spending increased by an estimated 4.3 percent to $575.9 billion in fiscal year 2016, according to a CMS report posted Monday.

Federal Medicaid spending alone grew by an estimated 4.5 percent to $363.4 billion in FY 2016, while state Medicaid spending increased by an estimated 3.8 percent to $212.5 billion. CMS estimated that the federal share of all Medicaid spending remained at 63 percent in FY 2016.

The findings are part of the Obama administration's final Medicaid spending report. For the report, CMS said it analyzed prior Medicaid trends and 10-year projections of expenditures and enrollment under current law, including the impact of the 2014 eligibility changes under the ACA. According to the agency, the Medicaid expenditure and enrollment projections in the report are consistent with current legislation and administrative policy regarding Medicaid as of Dec. 1, 2016, and do not take into account any future changes to policy or legislation. There is one exception: the report assumes funding for the Children's Health Insurance Program is extended after FY 2017 through 2025.

Here are 10 other highlights and findings from the report.

Medicaid spending in FY 2015

1. The states and the federal government collectively spent $553.8 billion for Medicaid in FY 2015. This represents an 11.6 percent increase from FY 2014. CMS said this was the fastest growth in more than a decade, due primarily to Medicaid expansion under the ACA.

2. The federal government alone spent $349.8 billion for Medicaid in FY 2015, a 16 percent increase over the year prior, according to the report. CMS attributed this increase, in large part, to Medicaid expansion under the ACA. The states paid $204 billion, or about 37 percent of all Medicaid spending in FY 2015.

3. Medicaid provided healthcare assistance for an estimated 70 million enrollees on average in FY 2015, according to the report. This included 9.1 million newly eligible adults in the first full fiscal year of the ACA eligibility expansions. CMS estimated that overall enrollment grew by 7.6 percent between FY 2014 and FY 2015.

4. Estimated per enrollee spending in FY 2015 for children ($3,389), non-newly eligible adults ($4,986), and newly eligible adults ($6,365) was lower than that for aged enrollees ($14,323) and enrollees with disabilities ($19,478), resulting in an overall average of $7,492 per enrollee in FY 2015, CMS said. The agency noted that the figures include federal and state spending, but do not include spending for U.S. territories, administration, disproportionate share hospital payments, and unallocated collections and prior period adjustments. CMS estimated that per enrollee spending increased 4 percent between FY 2014 and FY 2015, reflecting a large increase in newly eligible adults.

Medicaid spending in FY 2016

5. In FY 2016, average Medicaid enrollment is estimated to have increased 3.1 percent to 72.2 million enrollees. CMS said nearly all of the growth in enrollment is estimated to have been among newly eligible adults (2 million of the 2.2-million increase).

6. CMS estimated that per enrollee costs for newly eligible adults decreased from $6,365 in FY 2015 to $5,926 in FY 2016 (6.9 percent).

Medicaid projections

7. Medicaid spending is projected to increase at an average annual rate of 5.7 percent and to reach $957.5 billion by 2025, according to the report.

8. Enrollment is projected to increase at an average annual rate of 1.5 percent over the next decade and reach 81.6 million in 2025, CMS said.

9. Medicaid spending for adults newly eligible under the ACA is projected to amount to $806 billion by 2025. CMS said most of this spending — $741 billion, or about 92 percent — is projected to be paid by the federal government.

10. CMS said it expects per enrollee costs for newly eligible adults to decrease by 6.3 percent in 2017 and 3.3 percent in 2018.

 

 

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