Report finds Utah Medicaid costs among nation’s lowest

In 2016, Medicaid spending in Utah averaged $703 per capita – less than any other state.

Utah’s average cost per Medicaid enrollee is also among the lowest in the nation, at $5,326.  And Medicaid accounted for 18.7% of Utah’s overall state budget, the eighth lowest in the nation. Utah also has a favorable match rate for federal funds in the Medicaid program, at 70% of the cost. That’s higher than most states.

Those are among the key findings of Coverage and Costs: What’s Driving Medicaid Spending in Utah, a new research report from Utah Foundation.

However, the report also discusses how changes in the population could drive up Medicaid costs. For instance, the average enrollment of older Utahns and individuals with disabilities has risen in recent years, and those groups are the most expensive.

Findings of the report include:

  • In 2016, per capita Medicaid spending in Utah was the lowest in the nation at $703. At the other end of the spectrum, Medicaid spending in New York was $3,169 per capita.
  • In 2014, Utah spent $5,326 per enrollee (in combined state and federal funds), one of the lowest expenditure levels in the nation. North Dakota spent $10,721, the highest in the nation.
  • National Medicaid spending is expected to grow at an average annual rate of 5.8% through 2026 – slower than Medicare, but faster than private insurance and far faster than the rate of inflation.
  • The federal government pays for 70% of qualifying Medicaid programs in Utah, the ninth highest reimbursement rate in the nation. Reimbursement levels are determined in large part by each state’s per capita income, and Utah’s is among the lowest in the nation because of the state’s high proportion of children.
  • While Utah’s Medicaid spending increased in 2017, there was a slight decrease in enrollment. This is due in part to an increase in the average enrollment of older Utahns and individuals with disabilities, who are more expensive to care for.
  • Although children make up 63% of Utah’s Medicaid enrollment, they account for less than one-third of total spending.
  • In Utah, individuals with disabilities make up less than 15% of enrollment, but account for nearly half of all spending.
  • In 2016, Medicaid accounted for 18.7% of Utah’s overall state budget, the eighth lowest in the nation.
  • The primary factors driving Medicaid spending growth include increases in health care and prescription drug costs, increases in overall enrollment, increases in enrollees who are older or have disabilities, and downturns in the economy.

Utah voters will face an initiative on the general election ballot this fall that would authorize a full expansion of Medicaid under the Affordable Care Act. The report discusses this and other proposals. Utah Foundation has not taken a position on the initiative.

“There is an ongoing tension between concerns about the growing cost of Medicaid and a desire to expand coverage to a broader population in Utah,” said Utah Foundation President Peter Reichard. “As current and future Medicaid proposals unfold, coverage and its costs will demand close attention from the public and policymakers.”