Health Affairs

Health Affairs, 28, no. 5 (2009): 1453-1465 doi: 10.1377/hlthaff.28.5.1453 © 2009 by Project HOPE	New Online   Getting Health Reform Done   After the State of the Union   Incremental Reform   E-Health in Developing World   Most-Read Articles in 2009

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Looking Ahead

Enrollment Is Driving Medicaid Costs—But Two Targets Can Yield Savings

John Holahan and Alshadye Yemane

This paper examines various reasons for the growth in Medicaid spending in the current decade. Although Medicaid spending has grown faster than the rate of increase in national health spending, much of this is explained by increased enrollment. Per enrollee, Medicaid spending actually compares favorably to increases in medical care prices and gross domestic product. The relative success in Medicaid cost containment seems to be attributable to limits on provider payment rates, expansion of managed care, limits on the use and pricing of prescription drugs, and expansion of community-based long-term care programs. We suggest two strategies for further cost containment.

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