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State Cash Flow Reductions May Squeeze Medicaid

Sun, 06/03/2001 - 11:00pm — Karen Stevenson
Description: 

After many years of cash surpluses, many states are anticipating reduced cash flows in the next few years. Programs which take up a significant portion of those budgets are likely to be scrutinized closely as legislators try to find ways to reduce cash outlays. Education spending accounts for about 20% of most state budgets, but is generally considered to be "untouchable". Medicaid spending represents 20% or more of most state budgets and is definitely NOT considered untouchable.

Long term care costs, especially nursing home costs, are the largest component of Medicaid expenditures. Expect to see many states trying to reduce Medicaid expenditures in the future by restricting payments for long term care services in some way. They could do this either by reducing the rates paid to providers, or by restricting access to Medicaid programs. Anyone who is counting on Medicaid to pay for their long term care costs should keep a close eye on the actions of state legislators in the few years.

After many years of cash surpluses, many states are anticipating reduced cash flows in the next few years. Programs which take up a significant portion of those budgets are likely to be scrutinized closely as legislators try to find ways to reduce cash outlays. Education spending accounts for about 20% of most state budgets, but is generally considered to be "untouchable". Medicaid spending represents 20% or more of most state budgets and is definitely NOT considered untouchable.

Long term care costs, especially nursing home costs, are the largest component of Medicaid expenditures. Expect to see many states trying to reduce Medicaid expenditures in the future by restricting payments for long term care services in some way. They could do this either by reducing the rates paid to providers, or by restricting access to Medicaid programs. Anyone who is counting on Medicaid to pay for their long term care costs should keep a close eye on the actions of state legislators in the few years.