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A Growing Fiscal Concern: Medicaid Spending In Maryland
By Marc Kilmer
Published on Wednesday, January 09, 2008
MARYLAND POLICY REPORT
In a special session in late 2007, Maryland's General Assembly expanded the state's Medicaid program. Given that this special session was convened to deal with the state's deficit, expanding a program that has caused financial challenges for the state seems an odd decision. Over the past 15 years, this program has strained state budgets, especially during times of economic recession. A different approach is needed.
Maryland contends with a long-term budget deficit and faces the possibility of a slowing economy. In this economic and fiscal climate, state policymakers should seek alternatives to Medicaid expansion. Steps to make health insurance more affordable for Marylanders and fundamental reform of the structure of Medicaid would benefit Marylanders more than expanding an expensive program.
Anyone considering Medicaid expansion should keep in mind the state's recent experience with Medicaid and the Maryland Children's Health Program (MCHP). Looking at spending patterns in the years since 1992 gives a good snapshot of how Medicaid and MCHP work in both good economic times and bad. Medicaid occupies a significant share of the state budget and squeezes out spending on other programs during economic hard times. Although Medicaid is known as a program that is needed to help people who are in difficult economic circumstances, only during 1998 did spending actually decrease despite many years of high economic growth.
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