Medicaid spending accelerates as states spend more than $2T

U.S. states spent more than $2 trillion in 2018 for the first time ever, according to a new report from the National Association of State Budget Officers, boosted by an acceleration in dollars given to Medicaid.

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Total spending rose 4.8 percent – a full percentage point more than the year prior.

While all seven areas examined in the report saw moderate growth, Medicaid spending accelerated at the fastest rate. State spending on the program, which provides coverage for low-income families, increased by 7.3 percent in fiscal 2018 – comprising nearly 30 percent of total spending. For comparison, higher education expenses grew by 3.2 percent, public assistance by 0.7 percent and transportation by 6.5 percent.

Over the past six years, more than half of growth in state spending is attributable to Medicaid. Growth in spending on the program has averaged 7.6 percent each year since fiscal 2013 – compared to 2.1 percent for the rest of total spending.

The Affordable Care Act (ACA), signed into law by former President Barack Obama in 2010, called for the expansion of the public health care program, which has become a point of contention among citizens and lawmakers as Republicans have unsuccessfully attempted to repeal the law. A provision of the ACA extends Medicaid coverage for individuals up to 138 percent of the federal poverty level, which is equal to about $35,000 for a family of four this year.

The issue was a big sticking point during the 2018 midterm elections, after which 37 states and the District of Columbia had adopted the Medicaid expansion.