Situation Report | March 8, 2021
The state’s latest Medicaid Global Cap Report shows state Medicaid expenditures of $16.088 billion for the period of April 2020 through December 2020 — $110 million over the $15.978 billion spending target.
The statutory Medicaid global cap allows spending to grow at the ten-year rolling average of the Medical Care Consumer Price Index (CPI). This is currently 2.9 percent, a decline over time from the original 4 percent.
This allowable growth rate is also significantly less than federal estimates of national health care growth rates, contributing to some of the pressures on the cap. Meanwhile, Medicaid enrollment has increased by 734,513 (or 12.1 percent), from 6.1 million enrollees in March 2020 to 6.8 million enrollees as of December 2020.
The updated fiscal year (FY) 2021 Medicaid global spending cap will decrease to $19.936 billion, from $22.364 billion in FY 2020, a net decrease of $2.428 billion. This net decrease is comprised of lower non-federal-share spending due to enhanced Federal Medical Assistance Percentage (FMAP) funds, offset by annual growth in the global cap.
If overall spending trends continue throughout the remainder of the fiscal year, projected Medicaid program spending is expected to exceed the annual global cap target by $123 million, according to the report.
The report highlights specific sectors. For instance, Mainstream Managed Care plan spending was $8.976 billion compared with a global cap target of $8.877 billion, or $99 million over the cap. Long Term Managed Care spending was $6.791 billion compared with a global cap target of $6.734 billion, or is $56 million over the cap.