COVID-19 and State Medicaid Cost-Containment Strategies

• In Event: Medicaid and Drug Policy

Abstract

This project aims to investigate state variations in Medicaid cost-containment strategies, both before and after the COVID-19 pandemic, and analyze the factors contributing to these differences. The increase in state health expenditures has prompted states to consider and implement various strategies to control healthcare costs including price controls, volume controls, budget controls, and market regulation. Given this, the COVID-19 pandemic is likely to have prompted state governments to reevaluate their strategies for healthcare cost containment. During the pandemic, states have grappled with reduced revenues, budget deficits, and concerns about long-term fiscal sustainability, all of which can significantly impact their decisions regarding healthcare cost containment. Concurrently, states have had the responsibility for ensuring the health of Medicaid beneficiaries within their jurisdictions. Preliminary findings suggest that the public health crisis has influenced states to prioritize the provision of health services, leading to considerations for expanding Medicaid benefits and augmenting provider reimbursement rates, rather than focusing solely on cost containment. Furthermore, state policy decisions pertaining to healthcare cost containment could be associated with the size of the healthcare industry and the broader political context within the state.

Author

• Shihyun Noh, SUNY Brockport