Policymakers Issue Briefs
No. 1
June 3, 2002

Is Medicaid busting the budget?

Connecticut's Medicaid spending has grown by an estimated 5.3% this fiscal year over last. Pharmacy costs, in particular, are rising at between 14 and 16%.
However, the US average for Medicaid growth this year is 13.4%.

Nationally, Medicaid spending is increasing - from 10.6% growth in FY'01 to 13.4% in FY '02.
However, Connecticut's rate dropped from 7.0% in FY '01 to 5.3% in FY '02.

Connecticut's Medicaid budget has a deficiency of $69.9 million for the current year.
However, Connecticut almost always runs a deficiency in the Medicaid account - both in good years and bad. $69.9 million is pretty typical.

Connecticut's overall budget grew by 4.3% for this year, a bit less than the growth in Medicaid spending.
However, the US average for states' budget growth from last year is only 2.0%.

Proposals for next year's budget include Medicaid increases of between 3.2% and 6.0% for Medicaid.
However, other states are proposing Medicaid increases averaging 6.0%.

Bottom Line: Connecticut's Medicaid increases are modest compared to other states. Connecticut's overall budget is growing far faster than other states', but Medicaid is not to blame.

Sources:
The Fiscal Survey of States, and Medicaid and Other State Healthcare Issues: The Current Situation, both May 2002, National Governor's Association, National Association of State Budget Officers (http://www.nasbo.org)
Appropriations Committee Budget 2002
2002 Governor's Midterm Budget proposal (http://www.opm.state.ct.us)
2002, SB-660, An Act Making Adjustments to the State Budget
Office of the State Comptroller