Medicaid Enrollment, Spending Increases Higher Than Projected
New survey data show increases in Medicaid enrollment and budget pressures in most states, at a time when federal lawmakers are considering expanding the program to an estimated 11 million people, the New York Times reports.
The survey of state Medicaid directors released Wednesday by the Kaiser Family Foundation found that:
- Enrollment in Medicaid grew by 5.4% in fiscal year 2009 -- the highest growth in six years and well above the 3.6% growth that had been projected (Sack, New York Times, 10/1);
- State Medicaid spending grew by 7.9% in FY 2009 -- the highest growth in five years -- compared with the 5.8% growth rate that was predicted at the beginning of the year (Wayne, CQ Today, 9/30). A 6.3% spending growth rate is expected for FY 2010;
- Two-thirds of states froze or reduced payments to health care providers in FY 2009; and
- Three-fourths of states say they will likely have to alter their budgets this year to keep up with Medicaid spending growth by finding more money for the program, cutting benefits or reducing payments to providers (New York Times, 10/1). Twelve states think a Medicaid budget shortfall is certain this year (Lambert, Reuters, 9/30).
California, which had the largest budget deficit of any state last year, cut Medicaid provider rates by 10% and will eliminate coverage for some optional services this year.
Role of the Stimulus, Outlook
About $87 billion in funding from the federal stimulus package helped some states avoid severe benefit cuts and preserve provider payments, though state officials are concerned about how to cope after the funding expires in 2010.
The report said, "Many states believe they may be pressured to consider previously unthinkable eligibility and benefit reductions." According to the report, unless corrective action is taken, states may soon make cuts "on a scale not ever seen in Medicaid."
State officials also are concerned about a federal plan to expand Medicaid eligibility to anyone with an income of up to 133% of the federal poverty level.
The report said, "Many officials felt their states would be unable to finance the cost of a Medicaid eligibility expansion unless the federal government assumed 100% of the costs, especially during the early years, given the dire fiscal conditions states are facing due to the recession" (New York Times, 10/1).
The proposal would have the federal government pick up between 77% and 95% of the cost of the expansion, with states contributing the difference.
Under a deal between Senate Finance Committee Chair Max Baucus (D-Mont.) and Senate Majority Leader Harry Reid (D-Nev.), the federal government would pick up 100% of the cost of the expansion in Michigan, Nevada, Oregon and Rhode Island for the first five years (American Health Line, 9/29).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.