Medicaid 101 Policy Academy: Medicaid & State Budgets

October 10, 2019

Medicaid Policy Academy The Council of State Governments

Medicaid and State Budgets

Stacey Mazer Senior Staff Associate smazer@nasbo.org

NASBO Overview  







Began in 1945 Professional membership organization for state budget officers NASBO members are the chief financial advisors to our nation’s governors Provide information, opportunities to share best practices, and trainings to state budget offices Publish 50-state fiscal data 2

Current State Fiscal Environment

3

3

Key Themes & Common Budget Items for Fiscal 2020

4

*Average

State General Fund Spending Expected to See Moderate Increase In Fiscal 2020, After Above-Average Growth in Fiscal 2019

* 41-year historical average annual nominal growth rate in state general fund spending is 5.4 percent.

5

Moderate Revenue Growth Trends Expected to Continue in the States in Fiscal 2020

* Fiscal 2019 growth rates based on estimated data. Fiscal 2020 growth based on revenue forecasts used to put together governors’ recommended budgets. Source: NASBO Fiscal Survey of States.

6

No States Made Mid-Year Budget Reductions in Fiscal 2019 Due to a Shortfall

Budget Cuts Made After The Budget Passed

Recession ends

Recession ends

Recession ends

Note: Beginning in Fiscal 2018, NASBO asked states reporting net mid-year budget reductions as to whether the reductions were made due, at least in part, to a revenue shortfall. Effective in FY2018 going forward, only states reporting mid-year budget cuts due to a shortfall are included in the totals reported in this figure. Prior to FY2018, particularly in non-recessionary periods, states that reported mid-year cuts that were due to other reasons, such as a reduction in caseload, would have been included in the counts above.

@NASBO

Most States Continue to Strengthen Rainy Day Funds 37 States Report Increases in Fiscal 2019; 32 States Forecast Increases in Fiscal 2020

8

Total State Expenditures

By Function

Estimated Fiscal 2018

Source: NASBO State Expenditure Report 9

9

General Funds Expenditures

By Function

Estimated Fiscal 2018

Source: NASBO State Expenditure Report

10

10

Percentage Change In Medicaid Spending (By Fund Source)

Medicaid Spending in the States Forecasted to Slow Slightly in Fiscal 2020, According to Governors’ Budgets

Fiscal 2019 growth rates based on estimated data. Fiscal 2020 growth based on governors’ recommended budgets.

Source: NASBO Fiscal Survey of States.

11

MAJOR CHALLENGES AND TRENDS IN MEDICAID

• Concern about impact of costly populations, high cost pharmaceuticals, and federal regulations and policies.

• What will we be seeing in administrative flexibility from CMS? Activity has been centered around waivers. What will be impact of court decisions in Medicaid?

• What will be changes in policy involving state match in Medicaid?

• Greatest fiscal threat would be from any plans to cap federal reimbursement for Medicaid.

12

Outlook for states – FY 2020 and beyond

13

13

www.nasbo.org

Stacey Mazer Senior Staff Associate