Medicaid

The growth of Medicaid, which accounted for $142 billion in federal and state outlays in 1994, is outpacing even the growth of Medicare. This is happening at a time when states are feeling pressured financially and are seeking ways to care for their uninsured populations. In response, states are, one by one, reinventing their Medicaid programs, using the authority of section 1115 waivers. Named for section 1115(a) of the Social Security Act, these waivers free states from some Medicaid restrictions on the use of managed care delivery systems. They also allow states to expand Medicaid-financed coverage to persons not normally eligible for Medicaid. This testimony presents a detailed look at Medicaid's growing expenditures, describes states' efforts to obtain section 1115 waivers, and summarizes the expenditures forecast of programs operating with waivers.