Medicaid cost hikes ‘unsustainable,’ HHS secretary warns state budgeters

WASHINGTON Spending for Medicaid is rising to “unsustainable” levels, and the program’s rapidly rising costs are threatening access to health care for poor and lower-income Americans, Health & Human Services Secretary Mike Leavitt warned Friday.

The U.S. Centers for Medicare & Medicaid Services is projecting that the Medicaid program will spend $4.9 trillion over the next 10 years. That marks an average annual increase of 7.9 percent annually, according to federal budgeters, significantly outpacing the U.S. economy’s growth rate.

CMS released its report Friday, prompting a grim warning from the HHS secretary at a meeting of state budget directors. “This report should serve as an urgent reminder that the current path of Medicaid spending is unsustainable for both federal and state governments,” Leavitt said. “If nothing is done to rein in these costs, access to healthcare for the nation’s most vulnerable citizens could be threatened.”

Combined, Medicaid and Medicare are expected to gobble up 6.9 percent of the gross domestic product by 2017 at current growth rates, according to HHS. This year, Medicaid will see its rolls swell to a projected 50 million beneficiaries, at an average annual cost per person of more than $6,100.