In 2016, Medicaid spending reached $581 billion—the highest level ever for the federal program—and covered an estimated 72 million beneficiaries. Over the next decade, spending is projected to rise 5.7 percent a year, topping $1 trillion by 2026, according to a new report from CMS on Medicaid projections.
Spending is already predicted to have hit $592 billion in Medicaid expenditures this year, an increase of 2.6 percent. Federal share of expenditures in both 2016 and 2017 was 63 percent. Average Medicaid enrollment is estimated to have risen 2.1 percent, to 73.8 million enrollees in 2017, according to the report, with the majority of expansion among adults.
CMS Administrator Seema Verma, MPH, called the rise in expenditures “unsustainable.”
“This independent report tells us what we’ve already known for quite some time,” she said in a statement via Twitter. “That despite promises made in the past, our healthcare spending, particularly Medicaid, is forecasted to grow at an alarming pace. The status quo is simply unsustainable. We must slow the growth in Medicaid spending so that it will always be around to serve those that truly need it.”
10-year projection
From 2017 to 2026, Medicaid spending if projected to outpace national GDP, with an annual growth rate of 5.7 percent compared to 4.1 percent.
“As a result, Medicaid expenditures are projected to increase from 3.1 percent of GDP in 2016 to 3.7 percent of GDP in 2026,” the report reads. “The increase in expenditures would place a growing strain on Federal and State budgets.”
By 2026, enrollment is estimated to reach 82.3 million. However, long-term care expenditures are estimated to have dropped 1.6 percent in 2017
Historically, Medicaid expenditures and enrollment numbers have varied widely over time, due largely due to legislative changes that impact eligibility. Since 2014, Medicaid has seen a “significant increase in expenditures and enrollment” as a result of the expansion of eligibility for adults with incomes less than 138 percent of the federal poverty level.
The federal share of the program has also risen, from its historic average of about 57 percent to 63 percent in 2016 and 2017. However, it is expected to decline to 62 percent from 2018 through 2026 as states take on more of the spending for expansion.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."