While the “glitches” and problems with the start of enrollment for the state health care exchanges grab the attention of the press, the drama around the expansion of Medicaid continues to unfold. New reports from the Kaiser Family Foundation suggest that the Affordable Care Act is succeeding in reducing the rate of state spending on Medicaid, as costs rise more slowly. There are 25 states that have accepted the federally funded Medicaid expansion and their average rate of increase in spending is 4.4%. States that are not participating are seeing their costs rise 6.1% on average. Some participating states say that their overall net spending will decrease, due in large part to the federal government covering 100% of the cost of expansion in the initial years.
This good news still has a shadow side. Washington, DC announced that they would suspect provider payments under its Medicaid program because of the current federal government shut down. Unlike most states, DC’s expenditures are contingent on explicit permission from the federal government. Even so, the contingency fund it established has insufficient reserves to carry the program. Arizona Governor Jan Brewer (R) is still defending her decision to expand Medicaid against opponents in the state legislature, including fighting a lawsuit from a legislator and the Goldwater Institute. And Alaska may be the last holdout in deciding on whether to expand the program. Governor Sean Parnell told the state press that he would make a final decision by Christmas, right before the deadline to accept federal funding.
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