Federal stimulus funds dry up and enrollment increases, thus, states are gearing to spend 19 percent more money on Medicaid. Following the released survey performed by the National Association of State Budget Officers and the National Governors Association, the governors provided the proposal to spend on Medicaid $15.9 billion more in fiscal year of 2012.
Governors are actually forced to recommend the reducing of expenditures by $2.5 billion on K-12 education, $3.5 billion on public assistance and $5 billion on higher education due to the record spending on Medicaid.
The Fights With The Rising Costs
Since the Great Recession began the state officials have been trying to fight with the increasing costs on Medicaid by means of driving more people to the program of government assistance as consumers were really suffering from the high prices which made some of them apply for additional funds in the form of payday loans or various cash advances. Federal stimulus funds have assisted the states to cope with the steep downturn in tax revenue since early 2009. The amount of $135 billion was used by the states overall in stimulus assistance to help cover the costs on Medicaid, education and other expenditures.
The States Are Left Alone
However, the funding is now ending and leaves the states shouldering their Medicaid burden alone. As a result, the states are forced to cut the benefits, reduce spending on prescription drugs and limit provider payments since it is now allowed by the federal government to kick participants out of the program.
The federal support disappearance is actually wreaking havoc on the state budgets. This contributes to a collective $75.1 billion in deficit for the coming fiscal year starting on July 1 in most of states.