Strategies to Help States Address Increased Expenditures During Economic Downturns

November 2006 Strategies to Help States Address Increased Expenditures During Economic Downturns The Government Accountability Office (GAO) examined strategies proposed by Congress as methods to help states cope with Medicaid expenditure increases during economic downturns. The GAO evaluated three strategies: 1) Allocation of supplemental funding based on unemployment rates 1) Allocation of supplemental funding based on a two year sample of per capita income (PCI) data rather than a three year sample 3) Allowing each state to decide if it needed a loan. The GAO determined that the unemployment rate model predicted 90% of state Medicaid expense increases. The use . . .