State Medicaid programs have been struggling as the worsening economy resulted i

Question

State Medicaid programs have been struggling as the worsening economy resulted in lower tax revenues, combined with growing enrollment and costs as the safety net for the newly jobless. Expansion of Medicaid under ACA only serves to increase the strain. States that were already reliant on managed care plans will likely increase their reliance as they seek the capacity to meet the increased demand for medical services of all types. What is the result on individual states of trying to raise the taxes to fund each of their Medicaid programs? What alternatives do the states have to fund their Medicaid programs? Explain your answer.

Explanation / Answer

State Medicaid Programs is an important part of social welfare system to improve and access health care facilities to the poor. Although, Medicaid has received strong criticism as after recession disturbed the budget of Medicaid programs, State increasingly turned up to hospitals and other healthcare service providers to pay taxes. This will on one side provide funds to state for programs but on the other hand disturbs local hospitals drastically, depending upon the number of Medicaid patients served by them. Especially at the time of increasing economic downturns, it becomes difficult for state to match the rising expenditures with the available funds. Unlike Federal states, Individual states should balance their budget to avoid tensions. In the last few years heavy enrolments leads to increase in Medicaid spending, in such situations state must increase the amount of non-federal dollars to spent on the program. One another important source of funding such programs can be the Intergovernmental transfers and other Non-federal revenues coming from mixed states. Also, State should promote savings by cutting some cost from other reduced needs like programs on behavioural Health, Public Health, uncompensated care, etc. and these savings can be reinvested for important Medicaid Programs. An open ended financing structure should be encouraged to provide flexible spending which can reduce the State effect of lower funding.

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