Administrative costs part of financial burden of Medicaid expansion, state directors say

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Medicaid expansion carries the additional cost of administrative expenses, according to state Medicaid directors. They gathered this week to discuss ways to deal with a proposed expansion of the Medicaid program under healthcare reform legislation.

Both the House and Senate versions of healthcare reform contain mandated expansions of state Medicaid programs that would add millions of enrollees across the country. One major and often overlooked cost of the expansion would be the administrative expenses that come with coordinating such an expansion, the Medicaid directors said. More personnel and new technology would be needed to coordinate the expansion, they say. State lawmakers, who already are grappling with budget problems, largely have been worried about the cost of providing care to these new beneficiaries. States have been asking the federal government to extend enhanced Medicaid funding provided by the American Reinvestment and Recovery Act until revenues recover.

The Medicaid directors also discussed ways to coordinate the program with the new health insurance exchange being proposed in Congress. The 2009 fall conference of the National Association of State Medicaid Directors wrapped up Wednesday. More info about the NASMD fall conference can be found at