States Cutting Medicaid Services, Limiting Eligibility

The Washington Post today looks at how a weakened economy is forcing all but nine states to "rein in" their Medicaid expenditures this year by reducing services and limiting eligibility. Higher unemployment rates have prompted more people to enroll in Medicaid programs at the same time that state revenues are declining and medical costs are rising rapidly, particularly for prescription drugs. As a result, states are "reversing a trend" of expansions of public health programs that lasted for almost 10 years, the Post reports. In addition to eliminating Medicaid eligibility for certain groups of people and cutting some programs, some states are limiting provider reimbursements or charging beneficiaries copayments for services that they used to receive for free. Eighteen states are "tightening" Medicaid eligibility rules during fiscal year 2003, compared to eight states in FY 2002, according to a recent study by the Kaiser Commission on Medicaid and the Uninsured. In addition, 15 states are cutting services this fiscal year, compared to nine last year, and 40 states are reducing the amount they will pay for prescription drugs or implementing preferred drug plans. In a more "subtl[e]" strategy, some states are also cutting back on programs designed to enroll more people who are eligible for Medicaid and make it easier for them to retain coverage once enrolled, the Post reports (Goldstein, Washington Post, 10/11).

In related news, the Kaiser Commission on Medicaid and the Uninsured yesterday released its latest Medicaid enrollment report, which indicates that enrollment growth in the program doubled during 2001. Nationally, the number of Medicaid beneficiaries increased by 3.3 million, or 9.8%, from December 2000 to December 2001, compared to an increase of 4.9% from December 1999 to December 2000. The enrollment rate for families, children and pregnant women increased 14.1% during 2001, compared to 7% in 2000, and the enrollment rate for elderly people and beneficiaries with disabilities increased 3%, compared to 2.2% in the previous year. The report also states that Medicaid "continues to evolve from a welfare-based program to a more traditional health insurance program," noting that many states decreased the cash assistance they offered to some beneficiaries (Kaiser Family Foundation release, 10/10). The report is available online. Note: You must have Adobe Acrobat Reader to view the report.