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State Medicaid costs are expected to increase after reaching pandemic lows in fiscal year 2021. The decrease in state funds dedicated to Medicaid was due to a surge in tax revenue and temporary federal funding. However, as federal aid concludes and Medicaid enrollment remains high, experts predict that the share of state funds spent on Medicaid will rise. Factors such as rising prescription drug prices and increased healthcare provider payment rates are contributing to the upward pressure on state Medicaid spending. The federal government covers a significant portion of state Medicaid costs, ranging from 60.3% to 83.5% in federal fiscal year 2021. The pandemic led to a temporary surge in Medicaid enrollment, but states expect a decline in fiscal years 2024 and 2025. [Extracted from the article]