Medicaid and Entitlement Reform

The commentary responds to a recent report from the Centers for Medicare and Medicaid Services (CMS) on future Medicaid spending growth. Medicaid spending growth will in fact be high but not probably as high as the CMS actuaries have forecast (7.9% per year). The evidence on Medicaid spending growth suggests that spending per enrollee in the Medicaid program has been held down to levels consistent with the medical care CPI and increases in GDP. The main cost driver has been enrollment growth - hard to address when the number of uninsured is rising. Further spending restraint could come from more efficient care for Medicaid's dual eligibles.