Bacon's Rebellion

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Medicaid, the Blob that Ate the Budget

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by

James A. Bacon
in , , ,

Medicaid, the blob that ate the budget
The Medicaid blob swallows all in its path.

Details on that runaway Medicaid budget…

Spending per Medicaid enrollee has been relatively flat the past five years, having increased less than 0.4% annually (adjusted for inflation) between FY 2011 and FY 2015. The cost driver has been enrollment, which increased 16.5% over the same period, according to a Joint Legislative Audit and Review Commission (JLARC) report, “Managing Spending in Virginia’s Medicaid Program.”

JLARC summarizes the consequences for Virginia’s General Fund budget:

Medicaid general fund spending has grown by an average of 8.9 percent annually over the past 10 years, while total general fund spending increased by just 1.3 percent. Medicaid spending comprised 22 percent of the general fund budget in FY16, increasing from 14 percent in FY07.

Chart source: JLARC
Chart source: JLARC

No wonder the Commonwealth can’t afford to give employees a pay raise and shore up their pension benefits (see previous post).

But there is potentially good news. The state still has room to squeeze costs by as much as $40 million per year.

In FY16, Virginia could have saved $17–36 million by not paying [Managed Care Organizations] for the inefficient provision of services. [Medicaid] also does not adjust administrative spending for enrollment increases, and these adjustments would have reduced spending by as much as $8 million in FY16.

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7 responses to “Medicaid, the Blob that Ate the Budget”

  1. LarrytheG Avatar
    LarrytheG

    important to understand where the money goes –

    http://bluevirginia.us/wp-content/uploads/2016/10/medicaidenrollmentspending.png

    then the question is where would you want to cut…

    don’t blame the Feds – these are Virginia citizens whom Virginia has to decide if they will be financially responsible for.. or not…

    As boomers age – we’re going to see more and more going into nursing homes in their final years – or we could just leave them in their homes and apartments and keep Medicaid costs down.

    It’s a terrible quandary – no question – but it’s cowardly and dishonest to pretend that this is something being imposed on Virginia by the Feds..

    1. James A. Bacon Avatar
      James A. Bacon

      Who, exactly, is “pretending that this is something being imposed on Virginia by the Feds”?

      1. LarrytheG Avatar
        LarrytheG

        well you got me! you’re being more careful in your tomes !

        but you still “blame” MedicAid like it’s forcing Va to pay for it!

        1. James A. Bacon Avatar
          James A. Bacon

          I don’t even know what that means! My point all along has been that Medicaid is an expensive entitlement, it costs Virginia a lot of money, and Virginia should be reticent about expanding a program that is crowding out other schools, public safety and other types of General Fund spending.

          1. LarrytheG Avatar
            LarrytheG

            well – it’s Virginia’s own citizens and what would you recommend – that we kick the elderly out of nursing homes or turn kids away from doctors or what?

            we’re all the time talking about how to reduce health care costs – and this is Virginia’s opportunity to walk the walk.

            Managed care and portable medical records could be a good start but the big costs are on the elderly, handicapped, nursing home side.. calling this “entitlement” sounds like it’s discretionary…that we can’t afford it…

            geeze 3/4 of our Virginia budget is education , health care and prisons.. don’t count Transportation – it’s primarily funded from dedicated taxes not general revenues.

  2. V N Avatar
    V N

    Are they truly disabled? I’ve seen people in disabled cars that I have no idea why they are disabled. Don’t go on about ‘invisible’ disabilities. I know people with them and they don’t have handicapped plates, etc.

  3. LarrytheG Avatar
    LarrytheG

    Report recommends that Va. consider cap on profits for insurance companies managing care in Medicaid program

    ” enrollment in Virginia’s Medicaid program, which served 937,000 people in 2015. The program served about 650,000 in fiscal 2006.

    However, most of the costs in the $9 billion program arise from spending on long-term care for elderly and disabled people, who account for less than a third of the Medicaid population.

    JLARC staff said the state could save money by tightening eligibility for the program, which already is one of the most restrictive in the country.

    The state also could save money by requiring high-income families to share in the cost of long-term care, such as nursing homes. Currently, family income isn’t considered because Virginia treats applicants as a “family of one.”

    http://www.fredericksburg.com/news/va_md_dc/report-recommends-that-va-consider-cap-on-profits-for-insurance/article_21edec12-b1c3-5b2a-b517-39b32699328f.html?showi=fbi

    So a LOT of the escalating costs are due to people who either did not save enough for their retirement.

    Isn’t this the reason why we need to have a mandate for insurance and retirement? This is what happens when people don’t do that – and taxpayers end up with those costs.

    The way that Virginia treats ownership of a home needs to be looked at. harder It’s entirely wrong for the state taxpayers to be bearing these escalating MedicAid costs as a result of people who own 500K homes but did not save for their care and want to keep their house to give to their kids and let taxpayers pay for their care.

    we need to take a harder line on this. Taxpayers are essentially funding inheritances … One way to do this is to require for the folks who have homes to get reverse mortgages on them to pay for the nursing home – and whatever is left, if any, goes to the heirs. It’s the height of avarice for people to spend their whole lives acquiring wealth to then want taxpayers to help them preserve it by covering their expenses.

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