Medicaid and the State Budget Problem

Abstract

Background: This study examines the Medicaid program as an essential part of the healthcare system in the United States. Methods: We employ an extensive discussion to highlight the importance of the Medicaid program and provide several policy suggestions. Results: The pressure to find innovative solutions to rapidly increasing costs of healthcare is reshaping the Medicaid program at the state level. As a result, states are having to rethink the design of their benefits and how best to coordinate the program, payers, and providers. These changes will affect the Medicaid program well beyond the current economic downturn. Conclusion: Overall, we propose that material changes are necessary in order to make the plan sustainable at the state level. Policy implications: Possible changes include revising the standards for Medicaid eligibility, new laws that shift the burden of healthcare from the state to private employers, and making healthcare more affordable for those who are not eligible for Medicaid.