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Informing Policy. Advancing Health.

Is it possible to contain Medicaid costs without just cutting benefits or payments?

Mention Medicaid and there seems to be no shortage of concerns. Will Colorado be able to cover everyone who needs the public health insurance program? Can we afford to? Can we afford not to? Regardless of the viewpoint, all sides agree Medicaid poses a challenge to the state. That challenge will again face legislators in January as they try to balance the state budget and deal with rising health care costs due largely to a weak economy and an aging population. Expansions required under federal health reform add to the concerns since states will be required to contribute to the cost, paying 10 percent by 2020.

The Colorado Health Institute (CHI) looks at cost-containment options for Colorado’s Medicaid program in a new publication. We examine the basics of the program – how it works, how it’s funded and the traditional methods used to control costs. Colorado has little flexibility in reducing costs because most of the eligibility expansions approved in recent years will be required under the Affordable Care Act beginning in 2014. So, the state may be able to benefit by considering some delivery and payment reforms to control costs.

We think it’s worth looking at pilot programs underway, other changes being discussed, what other states are doing and how future federal actions might affect Colorado. CHI hopes the publication will forward the discussion about controlling Medicaid costs through innovations that improve efficiency rather than simply cutting eligibility and benefits for enrollees and payments to those who care for them.