Skyrocketing Medicaid costs add to Ohio budget concerns

The federal Department of Health and Human Services released a report Friday that Medicaid benefits are expected to grow at an annual rate of 7.9 percent over the next ten years, reaching $674 billion a year by 2017 Source: “U.S. Predicts Rapid Rise of Medicaid Spending,” Wall Street Journal Health Blog, Oct. 20, 2008).

Health and Human Services Secretary Mike Leavitt called the report “an urgent reminder that the current path of Medicaid spending is unsustainable for both federal and state governments.”

According to the report, one particular area of rapid spending growth in Medicaid is long-term care, an area that is already the source of budget tension in Ohio.

Gov. Strickland’s across-the-board 4.75 percent budget reduction last month has already led to the creation of a waiting list for Ohio’s assisted-living program (Source: “Cost-cutting has own cost,” Columbus Dispatch, Oct. 18, 2008). Sen. John Carey, the chairman of the Senate finance committee, said the budget cuts could end up costing the state more money in the long run because Medicaid beneficiaries on the waiting list for assisted living centers would likely enroll in more costly nursing homes.