Via USAToday


Medicaid spending has declined unexpectedly this year, the first drop since the health program for the poor was created in 1965.

The historic reversal will free up billions of dollars in state budgets. Medicaid has been the fastest-growing expense for states over the past 10 years.

Medicaid spending fell 1.4% in the first nine months of the year compared with the same period a year ago, according to the Bureau of Economic Analysis. The drop was even greater — an unprecedented a 5.4% decline — after adjusting for the rate of health care inflation.

The spending has been reduced by cost-controlling efforts and a shift of some prescription-drug expenses to Medicare, the federal health program for the elderly.

States have made really aggressive changes in how care is managed in Medicaid,” Arizona Medicaid Director Anthony Rodgers said. “Every state has taken a different approach, but the success can be seen almost everywhere.”

According to USAToday, 56 million Americans (and how many illegals?) receive benefits through Medicaid, which the federal government pays 57%.  For 2006, Medicaid is projected to cost $300 million (just $5.30 per person!!). Sounds wonderful, Washington and the states have gotten their act together and have found a way to cut costs, right?  Nope, not the case:

Some Medicaid savings are the result of shifting costs to the federal government’s Medicare program. ….  This complicated cost shifting between the two programs makes it impossible to know precisely how much Medicaid cost cutting is simply shifting expenses to the federal program.

So as usual, Washington will trumpet its ability to cut costs, throwing out a huge smoke-screen to hide the shifting of those costs to another program.

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