By Martha Heberlein
State budgets continue to be a hot issue. As states are grappling with depressed revenues and searching for ways to balance their budgets, some have turned to Medicaid to help fill the gap. But, as with most debates about how much things cost and how money is spent, some of the arguments don’t tell the whole story.
To help dispel some of the ongoing misconceptions regarding Medicaid’s role in state spending, we released an updated issue brief on the subject. A few data points that may be of interest:
- In 2009, Medicaid constituted 15.7% of state general fund spending, far less than what was spent on elementary and secondary education (35.8%).
- While total spending on Medicaid increased by 7.8% in 2009 (due to increased enrollment during the recession), state spending on Medicaid actually declined by 3% as a result of fiscal relief.
- Over the last fifteen years, Medicaid spending as a share of state general funds has fluctuated only slightly, reaching a height of 17.4% in 2006, before declining to its current share.
We all understand the difficult decisions state leaders face when it comes to allocating resources and finding innovative ways to deal with rising health care costs, an aging population, and the increasing demand for coverage, especially in light of their ongoing budget deficits. However, making Medicaid the scapegoat for their budget troubles won’t solve their problems. In fact, cutting health care spending may lead to decisions that are harmful not only to the health and well being of a state’s residents but also to the longer term health of state and local finances.
