JLARC Report: Medicaid spending is top driver of state spending growth

A new report from the Joint Legislative Audit and Review Commission shows that Medicaid continues to be the main driver of state spending growth, accounting for more than 60 percent of general fund spending growth over the last decade. The general fund share of Medicaid, the largest single appropriation in the state budget, grew by 73 percent from 2008 to 2017, according to JLARC’s report.

“Once again, this annual report from JLARC shows that the increasing cost of Virginia’s current Medicaid program is crowding out needed funding for our public schools, colleges and universities, roads, and law enforcement officers,” said House Speaker William J. Howell (R-Stafford). “We consistently argued that Virginia can barely afford its existing Medicaid program, let alone the massive cost of expansion, and this report vindicates that position.”

Commenting on the report Speaker-designee Kirk Cox (R-Colonial Heights) said, “It’s a simple proposition: if you cannot afford your mortgage payment, you don’t build a new addition to your house. Virginia’s current Medicaid program covers around 1 in every 8 Virginians, and as this report shows, the costs are staggering and continue to climb, despite ongoing reform efforts. It would be financially irresponsible to ask taxpayers to fund the massive expansion contemplated under the Affordable Care Act.”

“As legislators, we have a fiduciary obligation to taxpayers and I take this responsibility seriously as Chairman of the House Appropriations Committee,” said Delegate S. Chris Jones (R-Suffolk). “Even as we instituted major reforms aimed at bending the cost curve, and controlled spending growth in other areas of state government, Medicaid costs continue to increase dramatically. This growth eats into funding that could be used for our teachers, law enforcement officers, and hard working state employees.”

Key findings from JLARC’s Annual Report on State Spending

• Medicaid GF spending increased 73 percent in the last decade
• Medicaid GF spending accounts for 60 percent of all general fund spending growth in the last decade, and 26 percent of all (GF + NGF) growth
• General Fund spending has decreased by one percent over the last decade, when adjusted for population and inflation growth
• State spending declined at 30 state agencies, and grew slower than the rate of inflation at 20 more