The state of Alabama is projecting a $265 million deficit this year, primarily caused by ballooning costs for entitlement programs like Medicaid.
In 2003, Alabama spent $220 million on Medicaid entitlement programs. In 2015, the state projects it will spend over $685 million on the same program, a 211 percent increase. Proportionally, Medicaid accounted for only 17 percent of Alabama’s General Fund costs, but has since grown to take up 37 percent in 2014.
‘A Bigger and Bigger Problem’
Alabama Policy Institute Vice President Katherine Robertson says the state’s budgetary problems are being driven by the constantly increasing cost of entitlement programs like Medicaid.
“We are going to have to make some reforms to Medicaid,” Robertson said. “There is not an obvious solution. It is clearly becoming a bigger and bigger problem.”
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