Medicaid Enrollment & Expenditure Forecast Project

Background

Medicaid represents $1 out of every $6 spent on health care in the U.S. and is the major source of financing for states to provide health coverage and long-term supports for low-income residents. While the Medicaid enrollments and expenditures are growing, states may face declines in revenues, which would make it difficult to finance the state share of funding for the program, and the number of cases of misuse of the program may also increase, which impacts the taxpayers.

Project Objective:

The goal for this project is to forecast annual Medicaid enrollments and expenditures both nationwide in the United States and state-specific for the next ten years. My work focuses state-specifically on the data in New Jersey, New York, and nationwide.

Strategy:

Based on the data of Medicaid enrollment & expenditure in New Jersey, New York, and nationwide for past 10 -13 years, use Excel to manage the datasets and use Prophet model in R to forecast future development for the next 10 years.

Process:

• Downloaded Medicaid enrollment and expenditure data from open sources including Data.Medicaid.gov and U.S. Department of Health and Human Services.
• Used Excel to filter out information needed for each part of the project, including annual or monthly total Medicaid enrollment and expenditure values for the states studied and nationwide. Saved the data for each part separately.
• Applied Prophet model in R with the filtered datasets to forecast future development of Medicaid enrollment and expenditure for the next 10 years. That is, from 2025 to 2034.
• Obtained the output projection data as well as trend graphs for each forecast.
• Checked and revised the codes and tabulated the outcomes. The outcome tables include columns of time, values of forecasting Medicaid enrollment or expenditure, and percentage increase for each year.

Problems Encountered and Solutions:

For the Medicaid enrollment in New Jersey, the dataset we could find included monthly data only. While forecasing the Medicaid enrollment in New Jersey using monthly enrollment data from 2017 to 2024, the forecast trend went down, which was unreasonable. To solve this, I went over both the codes and the original dataset, revised the format of the dates, and improved the codes. Then I figured out that the error was attributed to the incompleteness of the enrollment data of the year of 2024, which included data from only January to May. Therefore, I deleted the data of 2024 in this part and so used data from 2017 to 2023 to make the projection. Also, I added a regression line to the projection graph and used the values according to it to get mean values of the 12 months for each year as the annual values and make the forecast.

Outcome:

At the end, I got the projection graphs and tables for Medicaid enrollment and expenditure for the next 10 years in New Jersey, New York, and nationwide, which all showed increasing trends.

Medicaid Enrollment and Expenditure Forecast in New Jersey:

Table 1: The annual Medicaid enrollment forecast in New Jersey from 2024 to 2033 according to the trend line based on monthly projection data and the percentage of increase for each year.

Medicaid Enrollment and Expenditure Forecast in New York:

Medicaid Enrollment and Expenditure Forecast nationwide:

Comparison & Conclusion:

According to the output projection data, Medicaid enrollment and expenditure will keep rising for the next 10 years, both nationwide and state-specifically, but the percentage of increase for each year fluctuates.

In New Jersey, Medicaid enrollment is projected to increase for about 16% for the next 10 years, with a steady and relatively constant rate of change. The total increase of expenditure is expected to be 38%.

In New York, Medicaid enrollment and expenditure are significantly greater than in New Jersey. Enrollment is projected to have about 12.5% of increase and expenditure is going to rise for about 26.7%, which shows relatively less steep trend than those in New Jersey.

In both states, the percentage of increase in Medicaid expenditure would be over 2 times the rate of increase in Medicaid enrollment.

In terms of the United States as a whole, total Medicaid enrollment would rise for only about 9.5% for the next 10 years, while expenditure would increase sharply as 43%.

Discussion:

As data from different statistical sources could lead to different results, more solid and complete datasets would be needed to get more accurate forecasting.

In addition, as the incompleteness of Medicaid enrollment and expenditure data for 2024 would lead to inappropriate annual values, new statistical data for the year is needed.

Although the general trend of both projected Medicaid enrollment and expenditure steadily go up for the next 10 years according to the past data, there is a concern that should be taken into account. The Medicaid enrollment values in New Jersey, New York, and nationwide all have an obvious drop around the year of 2020. The cause of this phenomenon should be researched and determined whether it would affect our forecasting.