States to suffer under weight of continued long-term care spending, consulting firm finds

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States to pay less than expected for Medicaid expansion, Kaiser finds
States to pay less than expected for Medicaid expansion, Kaiser finds

A new report highlights the potential detrimental impact of long-term care commitments on state budgets.

Over the next 20 years, state Medicaid spending could climb as high as 40% of states' operating budgets in some areas, according to the report, "Medicaid Long-Term Care: The Ticking Time Bomb," from Deloitte Center for Health Solutions. The main driver of this potentially massive cost increase is long-term care spending through state Medicaid programs. Moving forward, the Medicaid program is expected to grow by 7.5% per year, due largely to age-related enrollment gains, according to the Deloitte report. Already, 2009 saw the largest one-year enrollment increase (9.9%) since 2002. This could impede states' abilities to function effectively, the report suggests.

Without a coordinated system of provision and financing of long-term care services, states are left to fend for themselves, according to the Deloitte report. Furthermore, the new federal healthcare reform law lacks any short-term relief for state budgets when it comes to Medicaid-funded long-term care. Deloitte Center for Health Solutions is a division of Deloitte Touche Tohmatsu, an international audit, financial advisory, risk management, tax and consulting firm.

Some promising and still-emerging quality improvement and cost-controlling initiatives include: some current public and private partnerships, transforming long-term care services to be more person-oriented, greater coordination between Medicare and Medicaid, greater quality workforce development, and new public and private financing alternatives.