GAO Report: Wide Discrepancies In State Medicaid Spending
By Christine Kern, contributing writer
Senators Hatch and Upton vow to use data from the report and keep asking questions.
There were vast discrepancies in state Medicaid spending across the country in fiscal year 2008, according to an analysis (PDF) conducted by the Government Accountability Office.
The study details variations in state Medicaid spending while examining the administrative and demographic factors that influence such spending. Under Obamacare, the Congressional Budget Office (CBO) expects Medicaid spending to increase from $267 billion in 2013 to $576 billion in 2024.
The highest costs were found in eight states, including New York, where each beneficiary cost at least $10,500. On the low end of the spectrum, six states, including California and Illinois, saw the cost per enrollee at less than $6,000. In the remaining 35 states and the District of Columbia, per-enrollee costs fell somewhere between those two groups. (Massachusetts was excluded because of errors in the state's data.)
The most economically efficient spending was in California, where roughly $3,800 was spent per Medicaid enrollee, while Rhode Island – which spent $11,700 on coverage for each beneficiary – was the least efficient.
The differences can be partly explained by variations in the makeup of the Medicaid population in each state. West Virginia, for example, had the highest rates of elderly and disabled beneficiaries, who generally are more expensive to cover, with 38 percent of enrollees falling into those categories.
But states also showed marked differences in coverage patterns for individuals within the same demographic groups. The percentage of elderly enrollees receiving expensive long-term care services varied from 18.4 percent in Florida to 65.6 percent in Iowa.
The GAO did note the numbers should be viewed with some caution due to imperfect data.
The analysis was requested by U.S. Senator Orrin Hatch (R-UT), Ranking Member of the Senate Finance Committee, and Representative Fred Upton (R-MI), Chairman of the House Energy and Commerce Committee. Hatch, the ranking member of the Senate Finance Committee, called for additional scrutiny of the spending discrepancies.
"Today's report provides a crucial look into the different ways states use and administer Medicaid funds," Hatch asserted in a statement. "As the report notes, there are significant differences in the average Medicaid per-enrollee spending across different states. Understanding these differences is instrumental in making real reform to this program that Obamacare has so carelessly expanded.”
Hatch explained that he plans to use this data to further investigate how states administer Medicaid funds, working with Chairman Upton to advance Medicaid reform proposals that make the program more effective for patients and taxpayers.
Hatch said, “One of the things that makes the Medicaid program unique is that it gives states the freedom to test policies and to learn from each other's successes and failures. This report illustrates how states have experimented with very different approaches to Medicaid, and have gotten very different results. Congress needs to use information like this to make sure this vital program actually works for those who need it and is fiscally sustainable in the long term."
"Medicaid is the world's largest health insurance program, and its cost is set to more than double in the coming decade," said Upton. "It is critical for us to understand all facets of the program, including the variation in state spending on Medicaid patients, as we continue to explore reforms to strengthen the program, making it more transparent, accountable, and financially sustainable."
The Upton-Hatch Medicaid reform proposal includes a capped allotment for Medicaid spending on a per-enrollee basis. The complete proposal can be found at here.