Study: Medicaid enrollment surges, threatening state budgets

"The recession is driving up enrollment in Medicaid at higher than expected rates, threatening gargantuan state budget gaps even as Congress and the White House seek to expand the government health insurance program for the poor and disabled," The New York Times reports. "The annual survey of state Medicaid directors, conducted for the Kaiser Family Foundation's Commission on Medicaid and the Uninsured, found that the program had been spared the worst effects of massive state budget shortfalls because of federal aid in the stimulus package. But it also revealed grave concerns about what will happen when that relief dries up at the close of 2010."

With unemployment rising, enrollment in state Medicaid programs grew by an average of 5.4 percent in the previous fiscal year, the highest rate in six years, according to the Kaiser survey. In eight states, the growth exceeded 10 percent." Enrollment is expected to continue to accelerate in 2010, "growing by 6.6 percent" (Sack, 9/30). (KHN is a program of the foundation).

The Associated Press: "The federal government will provide about $87 billion to states through the stimulus funding, but that ends Dec. 31, 2010, or in the middle of most states' 2011 fiscal year. Medicaid programs then may have to consider 'previously unthinkable eligibility and benefit reductions,' according to the study." According to the survey, "29 states said they would have cut eligibility without the stimulus help, and 36 said the money helped them avoid benefits cuts." But even with the stimulus money, "33 states cut or froze provider reimbursement rates, and 39 are expected to do so in fiscal year 2010, the study said" (Murphy, 9/30).

Reuters: "Adding potential pressure is a healthcare reform plan passing through Congress that would mandate all Americans have health insurance and change requirements for Medicaid -- pushing more people into the program.'It is highly likely that federal healthcare reform, if successful will build on existing state Medicaid programs, potentially resulting in new fiscal and administrative challenges for states,' the study said" (Lambert, 9/30).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.