LONG-TERM ARKANSAS MEDICAID SPENDING

GROWTH GREATER THAN U.S. AVERAGE, CPI

“Governor Beebe has repeatedly said that the current rate of Medicaid growth is unsustainable.” The Journal of the Arkansas Medical Society, November 2011

(September 2012) Long-term Arkansas Medicaid spending exceeded the U.S. average and the Consumer Price Index (CPI) before Gov. Mike Beebe supported expanding the program after the U.S. Supreme Court’s decision upholding nationalized medical insurance.

Beebe took office in 2007, and recently endorsed expanding Arkansas Medicaid, a decision left up to the states under the Court’s ruling. A state legislative group opposes the move. Arkansas Medicaid spending increased at an 8.4% average annual rate from FY2007 to 2010 versus 6.8% for the U.S., Kaiser Family Foundation data shows. Arkansas Medicaid spending also increased greater than the U.S. average annual growth rate in three earlier periods tracked by the non-profit group.¹

Medicaid Spending Also Exceeded Inflation

Arkansas Medicaid spending also exceeded the inflation rate (CPI). Spending increased at greater average annual growth rates in the periods reported by Kaiser (11.2%, 10.7%, 4.9%, 8.4%) compared to CPI (3.0%, 2.4%, 3.1%, 2.0%), Federal Reserve Bank of Minneapolis data shows.²

Summary: Arkansas Medicaid Spending Unsustainable

Arkansas Medicaid spending increases were unsustainable before this year’s proposal to expand the program.

--Greg Kaza

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¹ Arkansas Medicaid spending increased greater than the U.S. from FY 1990 to 2001 (11.2% vs. 10.9%), FY 2001 to 2004 (10.7% vs. 9.4%), and FY 2004 to 2007 (4.9% vs. 3.6%). www.statehealthfacts.org

² http://www.minneapolisfed.org/community_education/teacher/calc/hist1913.cfm