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PRIORITY ISSUE: Medicaid Reform

Total (all funds) spending on Medicaid will exceed $44.5 billion in 2005-06. Over the last five years Medicaid spending was responsible for 35.5% of the total increase in all funds spending; education was next at 9.8%.

Medicaid costs are now the biggest driver of state spending increases. The inability to control these costs is limiting the state's ability to meet other pressing needs while burdening taxpayers at the state and local levels.

At the county level, Medicaid costs have forced counties to significantly increase real property and sales taxes. Five counties are approaching their constitutional tax limit.

Despite its high costs, providers and payers are frustrated by a system whose fragmented structure serves neither the recipient nor the taxpayer well.

Business Council Priorities

It is time to adopt fundamental reforms which will improve health outcomes and reduce costs. Among the reforms which will aid patients and taxpayers alike are the following:

These proposals offer the potential for significant savings and significant improvement in the care provided Medicaid recipients. Others have proposed or will be proposing reforms which we also should be considering. Our list of reforms does not purport to represent the full compendium of changes which should be considered and supported. Rather, they focus on four key recommendations which we believe should be part of any comprehensive reform package.

If adopted, the state would be in a position to cap or to assume the local cost of Medicaid - a position we support if cost containment reforms are enacted and savings at the local level are returned to the taxpayer.