ABSTRACT
Medicaid provides coverage for more than 62 million low income individuals or approximately one in fi ve Americans, including 31 million children, 16 million adults in low income families, and 16 million elderly and persons with disabilities (Kaiser Family Foundation March 1, 2013). As the largest federal grant-in-aid program, total Medicaid expenditures reached $413.9 billion in 2011. It is also the largest fi scal item in state budgets, accounting for 23.7% of total state spending (National Association of State Budget Offi cers 2011). At 2.5%, average annual growth in per capita Medicaid spending has been lower than average annual growth in both national health expenditures per capita (3.3%) and private health insurance per enrollee (5.5%) (Kaiser Family Foundation March 1, 2013). Still, annual growth in states’ Medicaid expenditures has exceeded growth in general revenues, thereby causing Medicaid to consume increasingly larger proportions of state budgets. This has forced a tradeoff with other priorities such as education and highways since all states but Vermont must balance their budgets.
