Medicaid Pays

Needs and costs of 50+ million Medicaid enrollees… We’re talking excess. Overall health costs in the U.S. in 2003 (the latest year for which data is available) was $1.67 trillion. Of this, about $300 billion was spent on Medicaid. Note, though, that chronic diseases and conditions like heart disease, cancer, and diabetes, were estimated to be responsible for 83% of all Medicaid spending. And the costs to Medicaid are growing as the population ages and needs care for managing these diseases and conditions. One Kaiser Family Foundation report notes that: “Between fiscal years 2004 and 2005, state general funds grew at a steady rate of 28 per cent, while state Medicaid spending growth more than doubled (from 4.8% to 11.7%).”

Anyone trying to convince insurers like Medicaid of the excessive costs of the elderly chronic disease populations must be armed with specifics. Here’s a sampling for you to use:

1. Council of State Governments. Healthy States, Trends Alert. “Costs of Chronic Diseases: What are States Facing?” Lexington, KY: Council of State Governments, 2006. This regular quarterly newsletter, Healthy States, Trends Alert (at: http://www.healthystates.csg.org/NR/rdonlyres/DA24108E-B3C7-4B4D-875A-74F957BF4472/0/ChronicTrendsAlert120063050306.pdf ), notes that: “Costly, debilitating and preventable chronic diseases are among the key contributors to the increased costs states face…” and estimates that over 83% of Medicaid spending is for people living with chronic diseases.
2. Caring Magazine (from the National Association for Home Care), April 2006 issue is devoted to Medicaid—its history, growth, and state-specific payment/care provision tribulations. In one of this issue’s articles, Mike Leavitt, former Secretary of Health and Human Services, notes Medicaid payments in 2004 of $3.5 billion for home health services for more than one million Medicaid beneficiaries, this in the face of impending Medicaid cuts and rising numbers of elderly beneficiaries.
3. A range of reports available online from the Kaiser Family Foundation (at: http://www.kff.org/kumc), particularly the Commission on Medicaid and the Uninsured, Survey of State Medicaid Officials. It’s noted here: “Between fiscal year years 2004 and 2005, state general funds grew at a steady rate of 2.8 percent, while state Medicaid spending growth more than doubled (from 4.8% to 11.7%).

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