Medicaid, health care spending straining state budgets

A new survey conducted by the National Governors Association found that although states’ revenue and overall spending continue to decline, the amount of money being targeted for health care, and in particular Medicaid, continues to increase (Source: “States Experience Tighter Fiscal Conditions as National Economy Continues Decline,” National Governors Association news release, June 19, 2008).

The survey of state financial projections at the end of most state's fiscal year found that nearly one-third of total state spending is for health care, with Medicaid comprising about 22 percent of total state expenditures. That percentage will likely climb in coming years as health care expenditures are projected to grow at an annual rate of 8 percent over the next 10 years. Despite the difficult financial outlook, however, nearly half of all governors have included proposals to expand health care coverage for the uninsured in their proposed fiscal 2009 budgets.