National Association of State Budget Officers issued a report
detailing governors’ executive budget recommendations for FY15. The report
finds that state budgets are expected to continue their trend of moderate
improvement in FY15, after several years of recovery in the national economy.
Regarding Medicaid the report finds that for FY14,
total Medicaid spending is estimated to grow by 13%, with state funds
increasing by 5.9% and federal funds increasing by 18.3%. Executive budgets for
FY15 assume an increase in Medicaid spending of 7.6% in total funds, with state
funds increasing by 5.8% and federal funds increasing by 10.2%. The projected
growth rates in FY14 and FY15 reflect both the Affordable Care Act’s Medicaid
expansion option that began on January 1, 2014, in addition to ongoing program
spending. The rate of growth in federal funds exceeds the state fund growth
rate since costs for those newly eligible for coverage are fully federally
funded in calendar years 2014, 2015 and 2016, with federal financing phasing
down to 90% by 2020.
Additionally, the report finds that Medicaid
enrollment is estimated to increase by 6.9% in FY14. In governors’ recommended
budgets for FY15, Medicaid enrollment would rise by an additional 8.9%. This
reflects both the impact from the Affordable Care Act including increased
enrollment in states that have implemented the Medicaid expansion that began in
January 1, 2014, as well as increased participation among those currently
eligible in both states that did and did not implement the expansion.