Nearly 3.3M more people enrolled in state Medicaid programs in June 2009: New analysis

Largest Ever One-Year Increase Illustrates Medicaid's Role In Covering People During Economic Downturns But Further Strains Tight State Budgets

With the country mired in a deep recession, nearly 3.3 million more people were enrolled in state Medicaid programs in June 2009 compared to the previous June, according to a new analysis by the Kaiser Family Foundation's Commission on Medicaid and the Uninsured. It was the biggest ever one-year increase in terms of absolute numbers, and boosted the June monthly Medicaid enrollment by 7.5 percent to 46.9 million people nationally.

It was the first time in decades that every state experienced an increase in Medicaid enrollment, and in 32 states enrollment grew at least twice as fast as the year before, according to the analysis, which includes data breakouts by state.

"State Medicaid programs have been able to help millions of Americans who have nowhere else to turn in a recession," said Diane Rowland, Executive Vice President of the Foundation and Executive Director of KCMU. "But the states obviously face significant fiscal pressures as increases in enrollment push up costs at a time when state budgets are already severely constrained."

The increase in enrollment reflects the role that Medicaid plays in reducing the numbers of people who become uninsured when the economy falters, with many people turning to the program for help after being laid off and losing their employer-based health insurance. Millions more who were not eligible for Medicaid likely joined the ranks of the nation's uninsured.

A new Kaiser survey of state Medicaid directors finds that 44 states and the District of Columbia are experiencing higher than expected program enrollment, resulting in increased spending for fiscal year 2010. At least 29 states say they are considering additional mid-year cuts in provider rates and program benefits.

Enhanced federal matching money for Medicaid provided through the American Recovery and Reinvestment Act of 2009 has proved critical in helping states maintain coverage. But that money is scheduled to expire on Dec. 31, 2010, which will increase the strain on state fiscal year 2011 budgets, Medicaid directors reported.

Although Medicaid enrollment is on the rise, costs of the program as measured on a per-person basis are not climbing at a faster rate than health costs more generally. (See "An Actuarial Rorschach Test" [link to http://www.kff.org/pullingittogether/021610_altman.cfm]). Moreover, in past recessions, after the economy has improved, Medicaid enrollment growth has slowed and sometimes contracted, suggesting that the record rate of enrollment growth seen in 2009 will eventually subside.

The enrollment analysis is part of a package of resources [link to http://www.kff.org/medicaid/kcmu021810pkg.cfm] released today in advance of a joint Kaiser Commission on Medicaid and the Uninsured (KCMU)-Alliance for Health Reform briefing on state budgets, Medicaid and the economy on Feb. 22.