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Medicaid costs and cuts

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Executive summary
The main purpose of this paper was to identify the problems associated with increasing costs of Medicaid expenditures in the United States. Medicaid spending usually takes up a significant proportion of the state budgets. The problem statement aimed at analyzing how the Medicaid program reached to its present condition? The decline on the state revenue and an increase on the enrollment rates are imposing significant burdens on the government budgets; how can we address the problem without jeopardizing the goals of the program? It was established that the increasing Medicaid costs are mainly due to increasing individuals enrolling for the program, increase in the provider payments and an overall increase in healthcare prices in the United States. The complexity of the problem of the Medicaid costs in the US is worsened by the decreasing state revenue. The possible solutions identified in the paper included cutting the Medicaid costs, raising the taxes and using reforms in the Medicaid program. The paper justified the use of Medicaid reforms as an effective solution for addressing the challenges of rising Medicaid costs.

MEDICAID COSTS AND CUTS
Problem statement
Medicaid costs are increasingly taking a relatively larger share of the federal and state budgets in the nation. With the decline in the state and federal revenue, the Medicaid costs for a single enrollee have been on the increase over a last decade. The National Governors Association referred to the rising Medicaid expenditures as a fiscal crisis in the states (Galewitz, 2010). From a nationwide perspective, Medicaid and other healthcare services take up 30 percent of the state budgets, which is resulting an extreme strain on the state budgets. An increase in the Medicaid costs poses significant shortfalls in the Medicaid expenditure at the state level. Without the implementation of effective reforms, Medicaid costs are threatening to consume a greater share of the budgets adopted by the states, which in turn may affect other items in the budgets. It is projected that in 20 years, Medicaid has the potential of putting the states to bankruptcy (Cutler & Mark, 2000). The problem with Medicaid expenditure at the state level is worsened by the effects of the recent recession on the revenues of the states, which are relatively lower compared to the pre-recession levels. A notable trend is the increasing fiscal pressure on the Medicaid costs and the increasing number of enrollees for the program and cases of dual eligibility are exerting significant pressure on the Medicaid costs (Hadley, 2003). This largely attributed to the ongoing challenge associated with the expansion of the Medicaid program since its introduction, increasing the burden on the state and federal budgets due to the fact that Medicaid costs are increasing amid declines in the revenue levels of the states, forcing the state governments to reduce the expenditure on Medicaid. This implies that the adequate policy response to the issues and challenges associated with Medicaid costs requires a comprehensive review of the problem. How did the Medicaid program reach to its present condition? The decline on the state revenue and an increase on the enrollment rates are imposing significant burdens on the government budgets; how can we address the problem without jeopardizing the goals of the program?
Literature Review
The Medicaid program in the United States healthcare system focuses mainly on individuals and families who have low income. The Medicaid is a means-tested program that is financed mutually by the state and federal governments, although its management is under the discretion of the state (Levit, 2003). The program constitutes one of the largest expenditures associated with the provision of medical and health services for low-income individuals in the United States. People who are beneficiaries of the Medicaid program include the United States citizen, low income adults and their respective children and people with particular types of disabilities. Medicaid financing in the United States is a significant budgetary issue for most of the states over the years, with an average expenditure of about 16.8 percent of the state funds being directed at the program. When the general match is included in the states’ budget, then Medicaid comprises of approximately 22 percent of each of the budgets at the state level. The CMS reports that the Medicaid program offered healthcare services to at least 46 million United States citizens during 2001 (Centers for Medicare & Medicaid Services, 2008). The number of the enrollees during 2002 was approximately 39.9 million citizens, which the children being the largest percentage of the beneficiaries. During 2004, approximately 43 million individuals enrolled for the program, resulting to an expenditure of about $ 294 billion. The enrollees further increased during the 2008 to approximately 49 million at an estimated cost of about $ 208 billion. During 2009, Medicaid the states’ expenditure on Medicaid comprised of 15.7 % of the state general funding and 21.1 percent when the federal matching funds are included (Galewitz, 2010). The significant problem is that the Medicaid Expenditure is increasing exerting pressure on the state budgets amid the current situation associated with budget shortfalls at the state.
Holahan & Sharon (2011) state that increases in the Medicaid expenditure can be significantly attributed to the increase in the number of individuals enrolling for the program and ever increasing costs of healthcare services. In order for the states to balance their budgets, Medicaid expenditure cuts have been adopted by majority of the states. Mitchell & Fairgrieve, (2004) claim that such an approach has potential impacts on the vulnerable citizens especially those who vastly rely on the medical assistance from the program.
The Medicaid program was established during 1960s a strategy to enhance the war on poverty. Its initial objective was to serve as a social safety net used for offering health insurance for people with low income, old aged and people with disabilities. Just after its implementation, Medicaid expenditure exceeded the expectations of the United States Congress, the larger part of its history since its implementation has been majorly related to the increasing costs and the impacts it imposes on the state budgets (Levit, 2003). There are different views that attempt to explain the rising Medicaid expenditures including the increasing number of individuals who are enrolling for the program, increase in the usage and the costs of prescription drugs, increasing amounts of provider payments, general increase in the healthcare costs and long term care expenditures due to medical inflation. It is important to note that the above factors only attempt to give an account of the increasing Medicaid expenditures but not offer an explanation as why Medicaid is expensive. Cunningham & Len (2005) notes a number of factors that need to be taken into account when assessing the high cost of the Medicaid program. First and foremost, Medicaid offers coverage for medically needier citizens of the United States who lack the capability of attaining health insurance from the private sector. This population usually comprises of citizens who are old aged and those who have disabilities. In addition, Medicaid also comprises of low income citizens (Hadley, 2003). In contrary to the insurance schemes that are employer based whereby medical insurance coverage commences when an individual is hired, Medicaid is usually triggered by a particular medical need that is outlined in the criteria. The second reason that explains why the costs associated with Medicaid are high is due to the fact that the eligibility requirements for the program usually establish incentives for the potential beneficiaries (Mukamel & Glance, 2008). Owing to the fact that eligibility of the program depends on low income and being in possession of few resources, Medicaid usually penalizes the individuals who succeed and encourages people to dispose-off their assets so that they could be eligible beneficiaries for the program. In cases whereby the beneficiary earns a dollar above the threshold for the individual and household income, they are bound to lose the entire Medicaid coverage. In addition, the rules of eligibility permits people to deprive themselves of the resources through transferring to other family members and heirs, as such, they can easily qualify the Medicaid program in duration of 3 years (Hadley, 2003). Despite the fact that an empirical evaluation of the Medicaid problem is complex and not easy to be determined, the rapidly increasing law practices in the United States together with the plenty anecdotal evident serve to the actual presence of the problem. The third possible factor that can be used to explain the increasing costs of the Medicaid program is that the delivery of its services entirely cut offs the costs of care for the consumers (Mitchell & Fairgrieve, 2004). Owing to the fact that healthcare is considered free for the beneficiaries of the Medicaid program, their levels of consumption are high to a point where their marginal benefits is null, which in turn creates a situation whereby the costs of the procedures are more compared to the value to the patients. Programs associated with managed care have also adopted such spending schemes, although they have reported considerable savings. Managed care programs results to an increase in the complexity for the payment providers and the program beneficiaries. Despite the fact that beneficiaries turn out to be satisfied with the program, the providers have indicate high levels of discontent. From a holistic view, such factors have played an integral role in increasing the Medicaid expenditure in the United States.
High Medicaid costs are a looming crisis in the United States healthcare as evident by the statistical projections. Statistical projections by the Center for Medicare and Medicaid services (CMS) have reported that Medicaid expenditure is likely to increase at a rate that is faster when compared to the United States economic growth in the next 10 years (Centers for Medicare & Medicaid Services, 2008). The report states that Medicaid expenditure increased by a margin of 7.3 percent during the period 2007-2008 at an amount of $ 339 billion. It is estimated that Medicaid expenditure will increase at a yearly average rate of 7.9 percent to reach $ 674 billion during 2017, which is relatively higher when compared to the economic growth rate of approximately 4.8 percent. The report released by CMS can be used to conclude that the increasing costs of the Medicaid program is unsustainable for the state governments, posing the need to implement policy measures to ensure fiscal stability of the Medicaid expenditures (Office of the Actuary, Centers for Medicare and Medicaid Services, 2002). Failure to address the increasing costs threatens the effectiveness of the United States healthcare. The CMS report further highlights that the Medicaid expenditures in the United States have the potential of rising above the entire costs directed at the healthcare system in the United States. Amidst these projections by the CMS, other report findings indicate during the next decade, there is an anticipated increase in the average enrollment at a yearly rate of 1.2 percent to clock 55.1 million beneficiaries during 2017; such trend is worrying imposing significant challenges in policy implementations to address the increasing Medicaid costs (Galewitz, 2010). The sharp increase worsens in the wake of economic downturn that has played an integral role in reducing the state revenues. The challenge is the factors contributing to the increasing Medicaid costs are increasing, yet the funds at the disposal of the government are declining, leaving the states with the only option of cutting the Medicaid costs to address the shortfalls in the state budgets. The following section discusses a problem analysis of the increasing Medicaid costs in the United States.
Problem analysis
Holahan & Sharon (2011) assert that states are facing fiscal crises mainly due a decline in the state revenue that can adequately meet the provision of the public services, especially healthcare insurance for people with low incomes through the Medicaid problem. The situation is worsened by the fact that states are constantly facing budget shortfalls in the wake of sharply increasing Medicaid expenditures. The declining state revenues and the swelling Medicaid expenditures have resulted to Medicaid being debated subject within the state legislatures (Mukamel & Glance, 2008). This requires having a comprehensive understanding why the Medicaid costs are ever increasing, why the containing the Medicaid costs is difficult, the effectiveness of the program and what can be done to address the looming crisis.
A notable fact is that the Medicaid costs are caused by the similar variables that are responsible to increasing the costs of private insurance (Levit, 2003). They include the increases in the costs of prescription drugs and hospital prices, and consolidation of the payment providers. Medicaid expenditures are also swelling mainly due to the increasing number of individuals enrolling for the program and the rising Medicaid expenditures per enrollee. The beneficiaries who usually consume a significant portion of the Medicaid expenditure are the individuals having severe disabilities and the elderly who are in poor health (Galewitz, 2010). The reasons why the elderly and disabled are increasing under the Medicaid program is unclear, although it is projected that this trend is likely to continue due to the demographic trends in the United States associated with increased aging. The swell in the Medicaid expenditure can be due to the acquisition of the life-saving medical treatment technologies aimed at lengthening the life of the elderly. The increasing costs associated prescription drugs usually increases the attractiveness of the Medicaid, implying that their usage are likely to lengthen the life of people living with health conditions such as HIV/HIV/AIDS. An increased enrollment in Medicaid home and community based care is a significant area of concern especially with the retirements of the baby boomers cohort, who are retiring between 55 and 65 years of age, a period whereby such people are vulnerable to disabilities (Mitchell & Fairgrieve, 2004).
Mukamel & Glance (2008) assert that the increased pressure on the Medicaid program can also be attributed to the extensive decline in the employer-sponsored insurance schemes. For instance, during 2002 and 2003, there was a drop in employer based insurance coverage for the elderly by 3.9 percent. Approximately 5.1 million individuals lost their insurance. In addition, there was a decrease in the number of uninsured children mainly due to the increase in the Medicaid expenditures. At the same time, the number of adults without insurance increased by 2.4 percent during the period which the enrollments for the Medicaid program increased by only 2 percent. Irrespective of the budgetary pressures, Medicaid expenditures increased at higher rate when compared to private insurance programs in the United States (Holahan & Sharon, 2011). Per capita expenditure on Medicaid also increased at a higher rate when compared to the private insurance costs per individual.
Medicaid costs in the US have proven to be a problematic issue for the policy makers at the state level because of the difficulty in containing the costs. Medicaid expenditure is a notable burden to the state budget but also brings significant benefits to the United States citizens by offering obligatory and discretionary services (Galewitz, 2010). This poses significant concerns as to why the states are reluctant to cut the Medicaid benefits. One of the possible reasons why the states are reluctant to cut the Medicaid benefits is that the United States citizens usually value the benefits associated with the program. Most of the benefits of the program were being implemented prior to the adoption of the Medicaid including long term healthcare coverage for children from low-income households, individuals with disabilities and the elderly (Hadley, 2003). Another reason why the states are unwilling to reduce the benefits of the Medicaid program is that the benefits help in strengthening the family units and improving human capital. Recent studies have reported that good health has the potential of increasing the annual earnings by15-20 percent due to increased involvement in productive work. Increased income implies that they make tax contributions and decrease the government expenditure for the healthcare services and disability programs (Cutler & Mark, 2000). Additionally, there is a positive correlation between the health and workforce participation, implying that poor health results to reduced labor productivity. States are also reluctant to waive the benefits of the Medicaid program is that some of the benefits help in increasing the savings and that budget cuts are considered penny wise and pound foolish. Prescription drugs and physical therapy can be used in replacing the high costs associated with long hospital stays and nursing home care. In addition, the view that some Medicaid costs cuts do not result in the states saving a considerable amount has resulted to the increased reluctance by the states to waive the Medicaid benefits (Mukamel & Glance, 2008). Budget cuts usually result to reduced federal matching funds. In addition, cutting acute healthcare benefits usually results to insignificant savings. The powerful provider groups are also a significant hindrance towards reducing the Medicaid expenditures (Cunningham & Len, 2005).
Galewitz (2010) claims that the over generosity of the Medicaid program also plays an integral role in increasing the Medicaid expenditures. The Medicaid program comprises of a long list of benefits making it what policy makers call a “Cadillac” program. The overly generous benefits of the Medicaid contribute to the rising costs of the program. The healthcare services provided by the Medicaid program are usually viewed to be overly generous (Hadley, 2003; Levit, 2003). For instance, the dental services and other benefit services that states are not required to be offering in accordance to the requirements of the federal law (Mitchell & Fairgrieve, 2004). The benefits that are considered as overly generous under the Medicaid program comprise of 12 percent of the Medicaid expenditures. In fact, per capita expenditures of such services are relatively higher for the poor individuals under private insurance when compared to those who are covered by the Medicaid. This poses the need to review the benefits package of the Medicaid program in order to reduce the Medicaid expenditure. The eligibility rules can also be argued to be broad due to the overly generous benefits of the program, which in turns results to an increase in the individuals enrolling for the program and subsequently the expenditures for the Medicaid (Galewitz, 2010).
The policy makers at the state level are faced with a significant challenge of containing the Medicaid costs, without jeopardizing the initial goals of the program. Despite the fact that the Medicaid program is somewhat a cost effective approach for offering health insurance coverage to low income individuals in the United States, the costs are high are increasing at a higher rate when compared to the state revenues (Mitchell & Fairgrieve, 2004). Owing to the fact that the optional benefits account for about 12 percent of the Medicaid expenditure, the policy makers at the state level are faced with the challenge of making tough decisions. It is arguably evident that there are so simple solutions to the complexity underlying rising Medicaid expenditures. In the light of these, the decision makers must evaluate the impacts of the changes in benefits packages or the rules of eligibility on the health conditions of the enrolled individuals. It is also important to evaluate whether the cuts in Medicaid expenditure will serve to increase the number of uninsured citizens. The impacts of the Medicaid programs on the health of children and their future potential to engage in product work should also be taken into consideration when proposing solutions to address the problems associated with increasing Medicaid expenditures. Another issue to take into consideration when proposing solutions to address the problem is the impacts of the cuts in the provider rates on the accessibility of healthcare by the beneficiaries of the program (Holahan & Sharon, 2011). Financial viability of healthcare institutions such as the safety net of hospitals should be taken into account when adopting cuts on the provider rates and imposing tighter eligibility rules. This approach provides a framework for the evaluation of potential alternative solution to address the problems associated with the increasing Medicaid expenditures. Basing on this evaluation framework, the following section discusses the possible solutions that can be implemented to solve the issue of increasing Medicaid costs (Galewitz, 2010).
Possible solutions
There are a number of policy recommendations that can be implemented to address the notable significant flaws that have been identified in the Medicaid program, which include the increasing number of individuals enrolling for the program and the overly generous benefit package of the program.
i. Raising the taxes
The first possible solution that can be used to address the increasing Medicaid expenditures is to increase the state revenue through raising the taxes. Raising the tax is an effective approach that can be used to increase the revenue to account for the increasing Medicaid expenditure. In fact, the reluctance to raise the taxes by the states only serves to complicate the matter owing to the fact that the principal problem is the increasing Medicaid expenditures amidst shrinking state revenue (Hadley, 2003). On the hand, it is important to note that raising taxes will not serve to address the underlying problems associated with the Medicaid; rather, it will only help in delaying the problems. Delaying the Medicaid problems can turn out to be exceedingly expensive for the tax payers and its sustainability in the long run is questionable. Owing to the fact that future projections cite an increasing growth rate of the Medicaid expenditures, tax raises also have to maintain the pace and will be susceptible to subsequent increases (Mitchell & Fairgrieve, 2004). This implies that it is important to take into account the fact that in the context of the Medicaid, opposition to tax raises cannot be considered as a philosophical argument when comparing big and small governments. Tax raises can be argued to be a practical approach that acknowledges that the growth rate of Medicaid expenditure is not sustainable and that the state legislatures must opt for other optional measures for reforming the Medicaid program. Therefore, tax raises can be a solution that serves to address the increasing Medicaid costs but not the underlying factors that contribute towards the growing expenditure (Mukamel & Glance, 2008).
ii. Cut the costs of the Medicaid expenditures
The second solution that can be used to address the problem of increasing Medicaid expenditure by the state governments is for the state governments to cut the costs. The Medicaid program is a federal entitlement program, implying that expenditure cuts for the program are only limited to aspects of optional coverage. As a solution to increasing Medicaid costs, states have for a long time relied on the tightening of the rules of eligibility to limit the eligible population, reduce the optional coverage benefits and decrease the provider payments. According to The Kaiser Commission, 49 stated have implemented strategies aimed at pursuing these options during 2003. The conventional responses may impose undesirable outcomes, implying that states have to critically evaluate various methods of reducing the Medicaid costs prior to their implementation (Mukamel & Glance, 2008). First and foremost, limiting the number eligible Medicaid beneficiaries is likely to result to a higher number of people who are not insured. These population usually lack access to care while still not resulting to lower costs owing to the fact that states usually spend more on the free care for those people lacking insurance compared to the money spent on Medicaid. In addition, there are many optional coverage benefits that serve as a replacement for the more expensive healthcare services, which in turn results to no net savings (Office of the Actuary, Centers for Medicare and Medicaid Services, 2002). A third constraint associated with cutting Medicaid costs is that the low provider payments pose a threat of eroding the participating rates, implying that additional cuts has the potential of jeopardizing the Medicaid program. From a holistic view, reducing the Medicaid expenditure has the potential of hurting a fraction of the most vulnerable citizens while imposing a little savings in the long run.
iii. Reforms in the Medicaid program
The third proposed solution is through the use of reforms in the Medicaid program that can be used to address the increasing Medicaid expenditure in the United States. Reforms in the Medicaid have been considered as a viable option, but the significant area of concern is the kind of reforms that are to be implemented under the Medicaid program. The consensus is that the reforms adopted should take into consideration the increasing Medicaid expenditures while not compromising on the high quality and access to care (Mitchell & Fairgrieve, 2004). It is arguably evident that the problems imposed by the increasing Medicaid costs are a significant challenge for the state legislatures and the policy makers. The reform options should be driven by the policy options aimed at providing less, through the reduction or elimination of the Medicaid benefits; pay less, through a reduction of the provider compensation; paying for few, through restrictive policies on eligibility groups; and enhancing the efficiency of the program, which can be achieved through the administration of a more efficient care, doing away with wasteful systems and laying much emphasis on prevention. An integration of the reforms aimed at achieving the above ensures that there is a reduced expenditure on Medicaid, ensuring quality care and reducing the number of people with no health insurance in the United States (Hadley, 2003).
There are no simple answers to address the challenge. Basically, the plan of approach should take into account the increasing number of people who depend on the program for their health insurance and on the other side the tax payers who are responsible for financing the program. The complexity of the situation is worsened by the fact that Medicaid is not sustainable, and that the adopted solutions must have the capability to adjust to the future trends of the individuals in need of the Medicaid program (Galewitz, 2010). Sustainable solutions are needed to address the problem of lack of sustainability of the Medicaid program. Basing on this framework, the following section proposes a solution and its implementation.
Solution and its implementation
The key towards the deployment of an effective solution to address the problem of the increasing Medicaid expenditures depends on the sustainability of the solution in the long term. Basing on this view, reforms in the Medicaid is viewed as the most effective solution that can be used to contain the increasing costs of the Medicaid expenditures (Cutler & Mark, 2000). Reforms should be implemented in every aspect identified in the previous section in order for the solution to be effective. Owing to the fact that the Medicaid program is funded jointly by the state and federal government, reforms should be implemented from all the levels of the government with the principal objective of ensuring that costs are contained without compromising on the quality of care administered to the beneficiaries of the program. The reforms at the federal levels should be conducted by the United States congress outlining the limit of the coverage that the states should provide. Reforms at the state levels should be done by the state policy makes through a consultation with the major players in the Medicaid program such as the payment providers and the healthcare institutions. When initiating the reforms, the eligibility of the beneficiaries and the burden on the tax payers who fund the program should be taken into consideration (Cutler & Mark, 2000). The following paragraph highlights some of the potential areas of reforms that should be implemented to contain the increasing costs of Medicaid expenditure.
Potential areas of reforms could include making use of personal resources and transfer mechanisms to counterbalance the increasing costs of long term care. In relation to this, policy makers at the state level should lay much emphasis on ensuring the availability and utilization of individual resources for their own care before getting any assistance from the Medicaid program. The second area of potential reform is to focus on the management of utilization of services (Galewitz, 2010). A number of states such as Texas have been using the managed care programs for the achievement of this goal. The managed care programs are available in urban areas, which is in contrary to the fee-for-service approach that is used in the rural areas. The fee-for-service approach aims at preventing the transference of obligations towards the patients and offers incentives to the payment providers to undertake unnecessary procedures. Another aspect that the Medicaid reform should adopt to contain the increasing expenditures is to encourage the employer-sponsored healthcare insurance schemes (Hadley, 2003). A reduction in the employer sponsored programs is considered as a major contributor towards the rising Medicaid expenditure in the United States, this implies that reforms aimed at encouraging employer sponsored programs has the greatest potential of decreasing the Medicaid expenditures and reducing the number of uninsured citizens in the United States. The Medicaid reforms should also aim at ensuring that the states maximize on the entitled federal share, by ensuring that policy makers at the state level embark on the development of an efficient Medicaid system for the delivery of medical aid to citizens that have low incomes. The policy makers should also aim at devising the methods for increasing the flexibility, ensuring that tax payers at the state and their respective political subdivisions get equitable treatment in relation to the federal funds directed at low-income initiatives (Galewitz, 2010).
Justification
Reforms in the Medicaid program is a viable solution for addressing the increasing costs of the Medicaid programs and the associated problems that it imposes on the efficiency of the program in meeting its goals and objectives (Cunningham & Len, 2005). This is mainly due to the fact that reforms can be implemented from a holistic approach to address each of the identified problems revolving around eligibility and enrollment issues, ensuring that there is elimination of people without insurance while at the same time ensuring that the quality and access to care is not compromised. Reforms in the Medicaid program can be implemented to individually address the problems associated with an increase in enrollment, increased utilization and the increasing costs of the prescription drugs, an increase in the provider payments and the high costs of long term care. The use of reforms is justified mainly because it focuses on the identification of loopholes in the Medicaid program, after which reforms are adopted to specifically address the identified flaws in the system.
In addition, reforms can be customized to incorporate all the other possible solutions identified including raising taxes to increase the state revenue and cutting Medicaid costs. This implies that reforms bases on a holistic view that can be comprehensively implemented towards the establishment of a sustainable solution in the long run. In order to guarantee sustainability of the reforms in the Medicaid program, the Congress should implement reforms that aims at increasing the federal funding for the Medicaid program in order to help states to keep up with the increasing the healthcare costs, which are increasingly imposing significant strains on the state budgets. The increase in the federal funding to the states for the Medicaid program is a measure that can be used to addressing the increasing enrollments in order to eliminate or reduce the number of people who cannot access health insurance. In order to supplement the increase in federal funding, the state policy makers should also devise policy measures to increase state revenue without imposing considerable burden on the tax payers (Cunningham & Len, 2005). Cost cutting measures should also be integrated into the reforms in order to contain the spiraling costs of the program. This should serve as a replacement for relying on Medicaid Expenditures for balancing the shortfalls in the state budgets. Since the focus of the Medicaid is mainly on the state budgets, state legislatures should be in charge of implementing the reforms adopted in the Medicaid program. Cost cutting should entail undertaking conscious decisions by the state policy makers in terms of the resources and tools that are allocated to address the increasing healthcare costs in the United States, the aging population and the increasing demand for healthcare insurance coverage. The states should not overlook these factors in the light of budgetary shortfalls. This will help in eliminating a fiscal crisis at the state level due to the increasing fiscal effects of increasing Medicaid costs on the state budgets (Cunningham & Len, 2005).

References
Centers for Medicare & Medicaid Services. (2008). Medicaid Spending Projected to Rise Much Faster Than the Economy. Washington, D.C: U.S. Department of Health & Human Services.
Cunningham, P., & Len, N. (2005). The Effects of Medicaid Reimbursement on the Access to Care of Medicaid Enrollees: A Community Perspective. Medical Care Research and Review , 676-696.
Cutler, D., & Mark, M. (2000). How Does Managed Care Do It? Journal of Economics , 526 548.
Galewitz, P. (2010). Consumer’s guide to Health Reform. Kaiser Health News , 40.
Hadley, J. (2003). Sicker and poorer: The consequences of being uninsured. Medical Care Research and Review , 3-75.
Holahan, J., & Sharon, L. (2011). Cover Missouri Project Report 2: Costs, Access, and Utilization Under Medicaid: A Review of the Evidence. Retrieved November 26, 2011, from Washington, DC: The Urban Institute: http://www.urban.org/health_policy/url.cfm?ID=1001002
Levit, K. (2003). Trends in U.S. Health Care Spending. Health Affairs , 154-164.
Mitchell, B., & Fairgrieve, B. (2004). Medicaid’s impact on the state budget. Fiscal forum , 1-10.
Mukamel, D., & Glance, L. (2008). Does Risk Adjustment of the CMS Quality Measure for Nursing Homes Matter? Medical Care , 125.
Office of the Actuary, Centers for Medicare and Medicaid Services. (2002). National Health Care Expenditures Projections: 2001-2011.

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