State Update

Reports of Interest - August 2014

(State Policy, Funding) Permanent link   All Posts

The 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.