More states consider cutting long-term care costs as Medicaid budgets face pressure

Medicaid programs continue to face financial difficulties as fiscal year 2005 progresses, causing more state officials to consider cutting long-term care costs as an option, according to a report from the Kaiser Commission on Medicaid and the Uninsured.

The number of states adopting long-term care cost-cutting rose from seven in FY 2002 to 17 in FY 2005, says the report, "The Continuing Medicaid Budget Challenge: State Medicaid Spending Growth and Cost Containment in Fiscal Years 2004 and 2005, Results from a 50-State Survey."

Increased enrollment, coupled with higher prescription drug and medical
services costs despite state fiscal stress, have put Medicaid budgets under pressure from state legislatures to decrease spending. Medicaid enrollment has grown by almost one-third since early 2001.

Although officials expect revenues to grow throughout the year, "States are approaching FY 2005 with caution," the report says.

The report also praises Medicaid for continuing to act as a "safety net" for the increasing number of beneficiaries despite the financial difficulties.