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Lowest Spending growth in US Medicaid

A new survey showed that the total spending on Medicaid has shown its slowest pace of growth in 10 years which was a reflection of a better economy// that has held down new enrollments, cost-containment efforts as well as a new federal Medicare drug benefit, according to a new survey. Medicaid is the state-federal health care program for the poor. It has shown a growth of 2.8 percent in fiscal 2006, according to the survey of state Medicaid directors by the Henry J. Kaiser Family Foundation. This has marked the fourth consecutive year of slowing growth and the lowest increase since 1996, when it was 2.7 percent.

The study found that the combined state and federal spending on Medicaid grew more slowly than state tax revenue for the first time since 1998. State tax revenue showed a growth of 3.7 percent in fiscal 2006 that ended for most states on June 30.

Diane Rowland, executive director of the Kaiser Commission on Medicaid and the Uninsured said, "The message here is that program continues to grow, but it is not out of control, or a (budget) Pac-Man as some have characterized it."

In the State legislatures' budget for Medicaid amounts for fiscal 2007, the survey has estimated an average total Medicaid spending increase of 5 percent over fiscal 2006. The survey found that the Medicaid enrollment in fiscal 2006 grew 1.6 percent versus 2005, the lowest growth rate since 1999.

The total spending growth rates in the survey include new state "clawback" payments to the federal government for those people whose drug prescriptions were shifted to the new Medicare Part D prescription drug benefit for senior citizens. These prescriptions had made up some 6 percent of total Medicaid costs, but under the clawback, states must make up part of those costs.

In addition the survey reported a continuing shift of Medicaid costs from the federal government to states with about three quarters of states experiencing a decline in f ederal matching funds for Medicaid in the last fiscal year.

For fiscal 2007, more states were looking to expand coverage and enhance programs rather than to restrict programs. The Deficit Reduction Act makes it more difficult for elderly persons to transfer assets to another person to qualify for Medicaid nursing home care.

The survey found that 22 states in fiscal 2007 are implementing long-term care partnership programs where persons are allowed to shelter some assets when they purchase qualified long-term care insurance.


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