CAUSES OF MEDICAID EXPENDITURE GROWTH

Expenditures for the Medicaid Program grew at the alarming and unexpec ted average annual rate of nearly 20 Percent from 1989 ($58 billion) t o 1992 ($113 billion). These statistics raise a critical question: Wha t caused spending to grow so dramatically? Using State-level data from 1984-92, this analysis examines the determinants of Medicaid expendit ure growth. The results indicate that Medicaid enrollment, Federal Med icaid policy, and State policy are significantly related to Medicaid e xpenditure growth. The analysis also finds the Prevalence of acquired immunodeficiency syndrome (AIDS) to be significantly related to Medica id expenditures.