States expect slower Medicaid enrollment, spending growth to continue

Medicaid enrollment and spending growth slowed to 3.9% and 5.9%, respectively, in fiscal year 2016 due to slower enrollment related to the Affordable Care Act, according to the latest annual survey of state Medicaid directors by the Kaiser Commission on Medicaid and the Uninsured. States anticipate even slower enrollment and spending growth in FY 2017, at 3.3% and 4.5%, respectively. High prescription drug costs, especially for specialty drugs, were cited as a key driver of higher spending. As of September, 32 states have expanded Medicaid eligibility under the ACA. Those states expect to see a 5.9% increase in Medicaid spending in FY 2017 as the federal share of costs for the expansion population falls to 95% Jan. 1; eight states plan to use provider taxes or fees to fund all or part of their cost for this population.