Recession swells Medicaid rolls, shrivels treasuries

Feb 19 2010

Nearly every state is considering or already making cuts to its Medicaid program as the recession swells rolls for the state-run health insurance program for the poor, The New York Times reports. Because of requirements for getting stimulus money to support programs, the states are not allowed to curb enrollment, and are instead cutting optional benefits and reimbursement rates. Lower rates could drive more physicians and other providers away from the program, which already pays very low fees.

In a few states, political leaders are pushing higher tobacco taxes or taxes on health providers as an alternative to cuts, but those are not popular either. Meanwhile, congressional Democrats have proposed adding 15 million people to the Medicaid programs as part of their health overhaul (Sack and Pear, 2/18).

A new Kaiser Family Foundation report has found that between June 2008 and July 2009, Medicaid rolls grew by 3.3 million people, a 7.5 percent increase, USA Today reports. A graphic developed by that newspaper shows that enrollment increased in all 50 states, which has not happened in more than a decade. To deal with the growth, beginning in 2011, California, Arizona and Virginia reduce eligibility. Massachusetts and some other states would cut benefits like "restorative dental" care. Still other states would simply cut reimbursement rates for doctors, hospitals and nursing homes (Wolf, 2/18).

KHN is an editorially independent program of the Kaiser Family Foundation, which published a detailed data analysis of Medicaid enrollment. The brief provides a breakdown by state, dating back to June 2000 (2/18).

The Washington Post: "Like the rising demand for food stamps and welfare benefits, the increase in people turning to Medicaid reflects the millions of Americans who have lost jobs and economic self-reliance and are asking the government for basic help, in many instances for the first time." Washington has provided extra Medicaid funding to states as part of the stimulus package passed last year but those "extra subsidies are due to expire at the end of this year, and states are lobbying hard to continue them for at least six months" (Goldstein, 2/19).

McClatchy/Kansas City Star: "Without an extension, most states won't be able to ensure that eligible Medicaid beneficiaries will be served, according to Families USA, a nonpartisan health advocacy group, which issued [its own] report Thursday." The report also argues that further federal support for expanded Medicaid programs would be good for the economy (Goldstein, 2/18).