Medicaid Spending to Skyrocket as State Revenues Tumble, New Report Finds

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Naples, FL — new report from the Foundation for Government Accountability (FGA) analyzes how the projected decline in state general funds, as outlined by Moody’s Analytics, could be exacerbated by impending spikes in state Medicaid spending.

According to Moody’s Analytics, state general revenues could plummet by an average of 20 percent over the next 15 months, with several states projected to lose significantly more. Notably, these shortfalls persist even with the federal government’s coronavirus relief funding.

Medicaid enrollment and spending is projected to increase as more businesses shutter due to the coronavirus pandemic—though according to FGA, this trend is a long time coming. Medicaid spending and enrollment have grown by more than 50 percent in the last decade, predominantly due to the enrollment of able-bodied adults.

Unfortunately, the federal government compounded the problem through the Families First Coronavirus Response Act (FFCRA), which prohibits states from removing ineligible enrollees—including those committing welfare fraud—from their Medicaid programs as a condition to receive the additional funding.

“The recent Moody’s report confirms what we’ve known for years: state budgets are in trouble and Medicaid is largely to blame. Now, it’s about to get even worse, and Congress has compounded the problem by tying states’ hands,” said Nicholas Horton, coauthor of the report & research director at FGA. “Congress needs to fix this mess they created and then states need to act to clean up their Medicaid programs, preserving them for the truly needy.”

Read the full FGA report here.

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The Foundation for Government Accountability is a non-profit, multi-state think tank that specializes in health care, welfare, and work reform. To learn more, visit 
TheFGA.org.