February 15, 2006
"This model shows us that the Alaska Medicaid program will fundamentally change over the next 20 years from a program that centers on children to one that is dominated by seniors," said Janet Clarke, DHSS Assistant Commissioner. "What is most helpful from the Lewin Group's effort is that the forecasting model will enable the department to take into account actual current expenditures when developing calculations for the future."
As the state's populations, programs, and actual expenditures change, the model will allow DHSS to update the forecast and plan for the future based on these forecast revisions. "The department will use these projections as a guide to make innovative, data-driven health care policy decisions in the future - and this will help the House Finance Health and Social Services Subcommittee make decisions about the department's Medicaid budget," said Representative Hawker. "It is a critical tool for us to have when working to manage the growth in state spending."
Population growth, an aging population, increased utilization of Medicaid services and increased cost of medical services are the main factors responsible for growth in Medicaid spending. As Alaska's Medicaid program shifts to become a program primarily serving the elderly, the overall cost will also increase because average costs for elderly recipients are higher than Medicaid costs for children.
According to the report, by 2025 Medicaid enrollment is projected to reach 175,000; and total spending on Medicaid services is projected to increase to approximately $4.8 billion. The projections indicate that the state will cover an increasing share of the Medicaid burden, reaching just over $2.1 billion in 2025. Currently Alaska serves 132,000 Medicaid recipients at a cost of $1 billion a year.
The Lewin Group is a national health care and human services consulting firm with more than 35 years of experience finding answers and solving problems for leading organizations in the public, nonprofit and private sectors.
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