Medicaid spending fell for the first time since the entitlement program was created in 1965, reports USA Today. According to a Bureau of Economic Analysis report, Medicaid spending dropped by 1.4% during the first nine months of 2006 (or 5.4% after adjusting for healthcare inflation). The two primary reasons for the drop are states’ efforts to reform their Medicaid programs and Medicare Part D now covering prescription drug costs for the elderly poor. Without the Medicare drug benefit, Medicaid spending would have been flat, according to a USA Today analysis.
