Summary: The $131 billion Medicaid program is at a crossroads. Between 1985 and 1993, Medicaid costs tripled and the number of beneficiaries rose by more than 50 percent. Medicaid costs are projected to rise to $260 billion, according to the Congressional Budget Office. Despite federal and state budgetary constraints, several states are pressuring to expand the program and enroll hundreds of thousands of new beneficiaries. The cost of expanded coverage, they believe, will be offset by the reallocation of Medicaid funds and the wholesale movement of beneficiaries into some type of managed care arrangement. This report examines (1) federal and state Medicaid spending, (2) some states' efforts to contain Medicaid costs and expand coverage through waiver of federal requirements, and (3) the potential impact of these waivers on federal spending and on Medicaid's program structure overall. The Comptroller General summarized this report in testimony before Congress; see: Medicaid: Spending Pressures Drive States Toward Program Reinvention, by Charles A. Bowsher, Comptroller General of the United States, before the House Committee on the Budget. GAO/T-HEHS-95-129, Apr. 4, 1995 (6 pages).
