Will Medicaid Run Out of Money?

In an annual report released October 17, 2008, the Centers for Medicare and Medicaid Services (CMS) predicted that during the next 10 years, spending on Medicaid for low-income seniors will outpace the rate of growth in the U.S. economy. See

This means, according to Health and Human Services Secretary Mike Leavitt, “that the current path of Medicaid spending is unsustainable for both federal and state governments. We must act quickly to keep state Medicaid programs fiscally sound.”

States are already struggling to keep up with Medicaid cost. In considering a second economic stimulus package, lawmakers are contemplating supplying federal funds directly to states to pay costs of running government programs, including Medicaid. The outlook for government long-term care assistance is increasingly more dismal.

This is frightening news given our aging population and the seeming increase in need for medical services. People who are fortunate enough to be able to afford health insurance, and long term care plans from quality providers will probably be okay, assuming their insurers pay benefits (which we know from experience is not always the case). Still those people represent only a small minority of our population. The future of health and long term care in this country is getting closer to a breaking point.

The full CMS report is available by following this link: http://www.cms.hhs.gov/ActuarialStudies/downloads/MedicaidReport2008.pdf.

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