Medicaid: Interstate Variations in Benefits and Expenditures: Hrd-87-67br

In response to a congressional request, GAO reported on interstate variations in Medicaid benefits and expenditures and compared states': (1) eligibility criteria; (2) scope of services; and (3) reimbursement to providers.

GAO found that: (1) the trend in Medicaid spending changed from one of rapid growth for the acute care of the disabled and for lower-income adults and children to long-term care for elderly and chronically ill people; (2) variations in states' eligibility criteria resulted in horizontal inequity, where people in similar circumstances but in different states received unequal treatment in terms of eligibility and benefits; (3) states imposed a variety of restrictions on the scope of services they offered by reducing coverage to optional groups such as the medically needy; and (4) most states attempt to pay providers less than market rates. GAO also found that availability of states' financial resources, as well as social and political factors, caused the varying eligibility standards, benefits, and reimbursement methods.