NCSL tells Nevada Senate panel Medicaid spending is growing but states have multiple containment tools

Sam Scottie and Catherine Costanza of the National Conference of State Legislatures briefed the Nevada Senate Committee on Health and Human Services on state-level Medicaid spending trends and policy options, saying Medicaid remains a major driver of public health spending and that states are pursuing a range of strategies to manage costs.

Catherine Costanza, who covers Medicaid topics for NCSL, told the committee that “Medicaid and CHIP accounted for almost $900,000,000,000 in health expenditures in the most recent fiscal data from fiscal year 2023.” She said per‑enrollee Medicaid spending has grown more slowly than Medicare and private insurance in recent decades, but noted significant variation across states and population groups.

Costanza said Nevada’s Medicaid spending per enrollee was about $5,495 in the most recent available data and that state per‑person spending nationally ranges from roughly $2,500 to more than $13,000 depending on the state and the population covered. She emphasized that older adults and people with disabilities account for a disproportionate share of Medicaid dollars: “Medicaid enrollees who use those long term services and supports only make up 6% of enrollees, but account for over 30% of Medicaid spending,” she said.

Why it matters: State legislatures fund part of Medicaid and face fiscal decisions about eligibility, benefits and provider payment. Cost growth, demographic shifts and potential federal financing changes could increase pressure on state budgets and influence provider participation and beneficiary access.

Key findings and policy options discussed

- Drivers of spending: Costanza summarized four primary drivers states watch—enrollment and acuity, service type and use, payment rates to providers, and administrative costs. She noted that enrollment growth during the COVID public‑health emergency lowered per‑enrollee averages because many new enrollees were relatively healthy and used fewer services.

- Containment and program design: NCSL outlined policy levers states use to manage Medicaid costs, ranging from short‑term actions (eligibility limits, benefit adjustments, lower provider rates) to long‑term strategies (value‑based payments, accountable care organizations, all‑payer claims databases that inform policy). Costanza highlighted Nevada’s all‑payer claims database and a December 2024 Nevada Medicaid cost‑driver analysis using that data.

- Transition incentives and buy‑in programs: States can encourage transitions from Medicaid to other coverage (for example, buy‑in programs for people with disabilities) to reduce reliance on state dollars; NCSL noted four states expanded or created Medicaid buy‑in programs in 2024.

- Oversight and fraud: NCSL recommended stronger managed‑care oversight, fraud detection and true vendor/procurement oversight as part of containing costs without reducing access.

- Revenue and financing tools: States use provider taxes, transfers and other mechanisms to finance the state share of Medicaid. Costanza warned that proposed federal changes to provider‑tax rules and broader federal proposals could change how states use those tools.

Immigrant coverage and state options

Costanza reviewed state options for covering immigrants. She said federal eligibility rules require coverage for certain qualified noncitizens and emergency services regardless of status, but states may choose to expand coverage for pregnant women, children and others using state‑only funds or CHIP options. She noted Colorado and Utah as examples of states that created state‑funded programs with enrollment caps or spending limits; Illinois’ experience covering older adults was cited as an example of fiscal risk and paused enrollment after projected costs rose.

Federal financing reform risk

Committee members and NCSL staff discussed pending federal proposals. Costanza summarized recent federal proposals tracked by NCSL, including changes that would alter the enhanced match for expansion adults, adjustments to the federal minimum match, limits on the use of provider taxes and proposals for per‑capita caps. She described those proposals as potentially significant fiscal changes and said few states had enacted laws in response yet, though some states are incorporating federal risk into budget planning.

Questions and follow‑ups

Committee members probed whether lower per‑enrollee costs during the pandemic reflected worse access or healthier enrollee mixes. Costanza replied that the pandemic’s continuous enrollment rules expanded coverage to many people who used fewer services and that states are now observing higher per‑enrollee costs as the post‑pandemic population stabilizes. Members asked for more state‑specific and more current claim‑level data; Costanza said Nevada’s all‑payer claims database can provide more point‑in‑time insight and offered to provide additional Nevada‑specific analyses and resources on managed care oversight, fraud detection and other topics.

Ending: NCSL provided contact information and agreed to follow up with documents and memos requested by the committee, including more detail on managed‑care oversight, provider tax considerations and Medicaid cost‑driver studies for Nevada.