Arkansas Medicaid Costs Triple Since Mid-1990s

by Greg Kaza, Arkansas Policy Foundation: Arkansas Medicaid program costs have tripled since 1996, increasing from $1.3 billion to $4.1 billion (2010), with an increase of another $416 million projected for 2011.⁽¹⁾

The number of unduplicated beneficiaries nearly doubled from 356,053 to 755,607. The average cost of treating a beneficiary rose from $3,651 to $5,429. The number of claims processed more than doubled to 37.6 million.

Medicaid is “a joint federal-state program of medical assistance for eligible individuals based on financial need and/or health status,” according to the Department of Human Services, which administers the Arkansas program. “Medicaid furnishes medical assistance to those who have insufficient incomes and resources to meet the costs of necessary medical services.”

Largest Expenditures by Category
Nursing home, hospital care (inpatient and outpatient) and other medical costs were the three largest categorical expenditures. Private and public nursing homes accounted for 35 percent of costs (1996) and 18 percent (2010). Hospital costs were 16 percent (1996) and 23 percent (2010). Other Medical costs were 12 percent (1996) and 19 percent (2010).⁽²⁾ The three categories accounted for nearly two-thirds of Arkansas Medicaid costs in the period.

Expenditures for physicians declined from 10 to 8 percent of costs in the period.

Medicaid spending accounts for 20.4 percent of the state of Arkansas budget.
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(1) “Arkansas Medicaid Fact Sheet,” Department of Human Services, November 1995;   Arkansas Medicaid Program Overview SFY 2010, “Economic Impact of Arkansas Medicaid,” p. 15.   (2) Ibid. p. 13.

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