Medicaid spending is expected to reach $1 trillion by 2026, according to a report from government actuaries.
The report, released Thursday by the Centers for Medicare and Medicaid, concludes that the growth in Medicaid expenditures, which are expected to average 5.7 percent a year, would “place a growing strain on federal and state budgets.” In contrast, gross domestic product is projected to grow at an average of 4.1 percent, which would make Medicaid expenditures increase from an estimated 3.1 percent of GDP in 2016 to 3.7 percent of GDP in 2026.
The part of Medicaid spending with the fastest growth is expected to be premiums and the fees that the government pays to private health insurance companies for them to manage enrollees.
They are expected to grow by an average of 7.8 percent a year from 2017 to 2026, reaching $578 billion at the end of that time period. By 2026, about 82.3 million people are projected to be covered under Medicaid.
Before Obamacare, states varied in who qualified for Medicaid, but the program generally covered people with disabilities, pregnant women, care for older adults, and children. This group continues to make up the bulk of those covered, according to the report.
Obamacare aimed to make the program more uniform. The law was originally written to have all states expand Medicaid to low-income people, but a Supreme Court decision made the provision optional. As a result, 14 states haven’t moved to expand the program. If they do, the number of people enrolled in Medicaid will grow.
In 2016, the total enrollment in the Medicaid program was 72.2 million, and 11.2 million of them were part of the Obamacare expansion population. By 2017, that number grew to 12.2 billion. The expansion population by itself cost federal and state governments $70.8 billion in 2017, up from $66.5 billion in 2016.
Total Medicaid spending in 2016 was $580.9 billion, about 63 percent of which was paid for by the federal government.
