Insight, analysis & opinion from Joe Paduda

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Feb
5

Why is Medicaid growing?

A significant portion of the $75 billion increase in Medicaid expenditures from 2000-2003 is due to increased enrollment. This may be partially due to the drop in employer-sponsored health insurance and/or a decrease in the number of employees signing up for health insurance with their employers.
Regardless, it appears that the price controls put in place for Medicaid in the form of fee schedules, and the utilization controls in effect in many jurisdictions are helping to hold per-enrollee cost increases under that experienced by privately insured individuals.
The implication is a growing population “insured” by the government, fewer people covered by private insurance, and a de facto transfer of risk from employers to the government.
Of course, this leaves out the 45 million under-65 Americans who had no health insurance coverage at some point in 2004; as this population increases it will lead to rising cost shifting to both governmental and private insurers.


Joe Paduda is the principal of Health Strategy Associates

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A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.

 

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