Medicaid Spending Growth Remained Modest in 1998, But Likely Headed Upward

Abstract

Analysis of Medicaid data for 1998 showed declining enrollment and moderate expenditure growth for a third successive year, but evidence suggests that enrollment started to grow after 1998 and expenditure growth also accelerated. This paper starts with a brief review of Medicaid spending and enrollment trends throughout the 1990s, looks more closely at Medicaid administrative data for 1998, and discusses several factors that appear to be causing both reported increases in spending after 1998 and predictions of higher growth rates for the near future. The main conclusion drawn by this analysis is that Medicaid spending is likely to grow more rapidly, and that higher growth rates have potentially serious fiscal implications for both federal and state governments. (Published by the Kaiser Commission on Medicaid and the Uninsured; 2001 February.)