Rising Healthcare Costs to Become Biggest Challenge for State Budgets

Rising healthcare costs are expected to become the biggest challenge for U.S. state budgets, potentially eclipsing education spending over the next 10 years, according to a report by Fitch Ratings.

Medicaid will likely receive cuts from the congressional supercommittee charged with trimming $1.2 trillion from the national budget, according to the ratings company. Medicaid represents the biggest share of federal aid to states.

Federal spending cuts and implementation of the 2010 healthcare bill will represent a "major concern for states," according to the report. President Barack Obama's 2009 stimulus program cushioned state budgets from increasing enrollment and costs for Medicaid; the legislation provided around $103 billion from Oct. 2008-June 2011, helping to offset increased costs associated with a significant jump in Medicaid beneficiaries.

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http://www.bloomberg.com/news/2011-09-27/health-care-costs-may-become-biggest-state-expense-fitch-says.html

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