States face looming crisis over Medicaid growth, which could trigger changes for providers and payer

States are about to face a major budget crisis due to exponential growth in Medicaid enrollment and a decline in tax revenue, which experts say could lead to provider payment cuts or other measures to contain costs.

Unemployment has been skyrocketing due to the COVID-19 pandemic, which will likely lead to an increase in the Medicaid rolls. With that comes increased costs for states, where Medicaid is the often the biggest budget item.

“Almost all of these state legislatures will see the biggest budget gap they have ever seen given the shutdown over the last few months,” said Chris Sloan, associate principal for consulting firm Avalere Health, during a webinar hosted by the firm. “States are going to be looking at both closing budget gaps due to the reduction in revenue and seeing increases in spending in their Medicaid rolls.” Read More...