In 2018, health care spending in the United States reached $3.6 trillion.¹ According to the Centers for Medicare and Medicaid Services (CMS), health care spending is projected to grow at an average annual rate of 5.4% between 2019 and 2028, reaching over $6 trillion in total spend by 2028.² Of the over $3.6 trillion spent in 2018, Medicaid’s share was 16% or almost $600 billion.³ As a result, Medicaid accounts for one out of every six dollars spent on health care while covering one in every five Americans (or approximately 72 million people). Prior to COVID-19, Medicaid enrollment was projected to remain flat through 2020. However, Medicaid spending was slated to increase by about 4% to over $630 billion. This projected increase was due in part to rising drug costs (in particular - specialty drugs), provider rate increases, and the increasing costs associated with caring for the aging population and people with disabilities (costs related to hospitals, nursing facilities, and increased utilization of long-term services and supports).⁴ Currently, both Medicaid enrollment and spending are increasing given both the high unemployment rate that has left millions of Americans without access to employer-sponsored health care coverage, and the additional resources required to fight the pandemic. Given the enrollment and cost pressures that exist in the Medicaid system (and that are being amplified by the public health emergency), states are responding by using their granted autonomy to require continuous adaptation by providers and Managed Care Organizations (MCOs), and to drive increased alignment between the Medicaid and Medicare systems. In this report, we detail the 10 specific actions that states and the federal government are taking in response to these system pressures and begin to outline just five of the trends that we see emerging from the COVID-19 pandemic.
*The research and analysis for this paper was conducted prior to the outbreak of the COVID-19 pandemic. Given the public health crisis, the landscape of the entire U.S. health care system, and the entire economy, is shifting. However, the health care policy and practice trends detailed here remain, though they will shift or be amplified due to the pandemic. Additionally, included are new trends that have emerged through the public health emergency that may have long-term implications for state health care agencies, managed care organizations, and the overall health care delivery system.