In many states, Medicaid expenditures are the largest line item in the state budget. Why have...
In many states, Medicaid expenditures are the largest line item in the state budget. Why have Medicaid expenditures increased, and what can states do to contain Medicaid costs?
Homework Answers
Ans)Medicaid is funded by the federal government and each state. The federal government pays states for a share of program expenditures, called the Federal Medical Assistance Percentage (FMAP). Each state has its own FMAP based on per capita income and other criteria.
- The Medicaid program is a joint-initiative between Federal and State governments and is administered at the state-level.
Medicaid expenditure increases can be caused by:
(1) cost increases for current enrollees resulting from changes in health care prices or health care utilization,
(2) cost increases caused by enrollment growth,
(3) increases in "other" costs, such as those for DSH or UPL payments or administrative.
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