Tuesday, July 24, 2012

The big Medicaid budget squeeze

Medicaid is an ever-growing volcano of cost to state governments, squeezing out programs such as education and infrastructure.  From our perspective, states are doing a terrible job prosecuting health care fraud, a major cause of the exploding cost to Medicaid. 
Created by Congress in 1965, Medicaid is hijacking state politics. Although the federal government covers a majority of costs (typically, 57 percent), the rapid rise in the states' share compels cuts in other programs or steeper taxes.  In the last decade, Medicaid spending has increased at nearly twice the rate of states' tax revenues, notes the Volcker-Ravitch report.
From the WSJ:
Rising Medicaid costs and pension expenses for public employees threaten states' abilities to provide basic government services as they continue struggling with unreliable tax bases in a weak economy, according to a task-force report.
Here is the full report.
Report of the State Budget Crisis Task Force Full

Here is an earlier report.
USA Inc. - A Basic Summary of America's Financial Statements

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