Long-term Forecast of Medicaid Enrollment Spending in Alaska:

Summary of Methodology
Since the federal government will be shifting a larger share of the cost of Alaska’s
Medicaid program back to the state 5, Medicaid spending from general funds and
other non-federal funds is projected to grow at 8.6 percent annually from 2009 to
2018.
Summary of Methodology
The MESA forecasting model has multiple, linked components, which
successively build upon each other. The first step in developing the model is the
distribution of the long-term population projections developed by the Alaska
Department of Labor and Workforce Development into individual forecasts for
regional and demographic subgroups. The next step is projecting enrollment for
each demographic group based on historical trends. Logistic regression models
of historic enrollee-level claim data are then developed to estimate the
probability that a Medicaid enrollee will use a Medicaid service. Finally, total
spending by service category and demographic group is projected, from which
state general fund spending is allocated based on known and projected future
federal financial participation rates. 6
Throughout the analysis, we rely upon the best available information, including
historic Medicaid claim data, the state of Alaska’s official population forecast,
and nationally recognized information on trends in medical prices. In no instance
do we impose any speculation on future Medicaid policies or procedures. Rather,
we develop the long-term forecast as if the policies and practices of today will be
the status quo throughout the forecast period.
The main factors responsible for growth in state spending on Medicaid services
are
Growth in Alaska’s resident population and changes in demographic
composition;
Changes in the Medicaid enrollment rate;
Changes in the use of Medicaid services by Medicaid enrollees;
Personal health services specific price inflation; and
Changes in federal financial participation.
Our methodology entails detailed analysis of each of these factors to formulate a
series of statistical models to project total and state spending on Medicaid
5 The costs will be shifted back to the state because of a lower Federal Medical Assistance
Percentage. Stimulus funds from the American Recovery and Reinvestment Act of 2009 are
currently set to expire in December 2010. See the State Spending section.
6 For detailed information on the development of the MESA forecast, please see “Long Term
Forecast of Medicaid Enrollment and Spending in Alaska: 2005-2025”.
Long Term Forecast of Medicaid Enrollment and Spending in Alaska: 2009‐2029
5