Record number of Americans signed up for Medicaid last year, straining state budgets

Associated Press: "A record number of Americans signed up for Medicaid last year, as the recession wiped out jobs and workplace health coverage. A report released Thursday by the nonprofit Kaiser Family Foundation found that enrollment in the safety-net medical insurance program jumped to more than 48 million — a record 15.7 percent share of the U.S. population. With the economy barely improving, states are forecasting a 6 percent increase in the rolls next year, meaning another strain on their cash-depleted budgets. The Medicaid numbers are the latest piece to emerge in a grim statistical picture of the recession's toll. The ranks of the working-age poor climbed to the highest level since the 1960s last year, according to a recent Census report. Nearly 12 million households received food stamps, a record" (Alonso-Zaldivar, 9/30).

Reuters: "The $814 billion federal economic stimulus plan passed last year provided extra funding for states for Medicaid, in the hope of covering the costs of the increased number of enrollees and of freeing up state budgets for spending in other areas. The plan helped states drop their spending on Medicaid, which can take up a third of their budgets, by 7.1 percent in fiscal 2010 and by 10.9 percent in fiscal 2009, Kaiser found. But even with the U.S. government shouldering a greater share of the burden, states were forced to make cuts. In fiscal 2010 48 of the 50 states made cuts to some part of their Medicaid programs, according to the report. In fiscal 2011, 46 states intend to cut back on Medicaid spending. Altogether, 20 states restricted the types of benefits enrollees could use in fiscal 2010, the largest number since records began in 2001" (Lambert, 9/30).

The New York Times: "The only hopeful news found by the survey was that the growth in enrollment slowed considerably in the second half of 2009. Yet, two-thirds of the Medicaid officials surveyed said they thought this year's appropriations might not be enough to cover continuing enrollment growth." The enhanced federal support for Medicaid is scheduled to end in June and "the state and federal shares will revert to their historical ratios. If the economy does not recover enough to reverse the enrollment growth, states fear they could be left with an unmanageable burden on their already inadequate revenues. Unlike the federal government, states must balance their budgets" (Sack, 9/30).

Kaiser Health News: "Advocates for Medicaid recipients say they understand why states are cutting spending, but they argue that the moves eventually will lead to higher costs because people won't get preventive care or be able to avoid health complications. … Officials in Arizona, one of the hardest hit states in the economic downturn, say they had no choice [when they cut benefits] as they addressed a more than $2 billion shortfall in the state budget" (Galewitz, 9/30).

Columbus Dispatch: "A spike in Ohio's Medicaid caseload helped fuel the largest nationwide increase in the program's 45-year history. … State Medicaid officials, according to a survey by Kaiser, are projecting a 6 percent increase in the caseloads this year. Ohio officials are more optimistic, forecasting that the state's rolls will climb about 3.5 percent, much lower than the 9 percent enrollment increase in the state program last year" (Candisky, 10/1).

CNNMoney: "A record 20 states implemented benefits restrictions in fiscal 2010 and 14 states plan to make additional changes in the coming fiscal year. The changes include eliminating dental benefits or limiting services such as therapy and personal care. Some 39 states cut or froze provider rates, and 37 states plan similar action in fiscal 2011. Eighteen states implemented reductions in long-term care services, and 10 states plan to do so in fiscal 2011" (Luhby, 9/30).

South Florida Business Journal: The results raise concerns about how the Medicaid system will fare under the added pressure of the health overhaul. "Under health reform, Medicaid will be expanded to cover nearly all individuals with incomes below 133 percent of poverty, resulting in a large expansion in most states, particularly among low-income adults without dependent children who historically have been excluded from coverage under the program" (9/30).

The Wall Street Journal: "There may not be enough state staffers to implement President Barack Obama's health-care overhaul on time, and contractors may need to be hired for some 'key' responsibilities, according to a report released Thursday by the Kaiser Family Foundation. While there is expertise among state staff members, designing insurance exchanges and handling increased Medicaid enrollment will be challenges, with many major health-care overhaul provisions going into effect in 2014. … An aging work force also presents a challenge to implement the health-care overhaul, according to the report" (Mantell, 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.