Medicaid spending creep worries state budget officials

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Many states' "rainy day" funds were depleted this year by escalating Medicaid costs, according to a just-released Fiscal Survey of States. The program continues to eat larger portions of state budgets, according to the study, which was jointly released by the National Governors Association and the National Association of State Budget Officers.

In fact, Medicaid will account for $329 billion in federal and state spending for fiscal year 2005. Overall Medicaid growth continued to rise from 8.7% in 2004 to 8.8% this year, investigators found. Fully 20 states reported Medicaid shortfalls in 2004 and two dozen states were expected to experience funding gaps this year, the survey revealed.

Full findings are available at,1169,C_PRESS_RELEASE^D_8631,00.html.