Many States Experience Increases In Medicaid Enrollment As Tax Revenues Fall Below Projections

Main Category: Medicare / Medicaid / SCHIP
Article Date: 23 Dec 2008 - 3:00 PDT

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The AP/San Francisco Chronicle on Monday examined how "[s]ince the recession began a year ago, many states have seen increases in the Medicaid rolls just as tax revenues are falling below projections." According to the AP/Chronicle, the unemployment rate has increased to 6.7% from 4.7% at the beginning of the recession in December 2007. An analysis released earlier this year by the Kaiser Family Foundation's Commission on Medicaid and the Uninsured found that each one percentage point increase in the national unemployment rate leads to an additional one million beneficiaries enrolled in Medicaid and SCHIP. Currently, Medicaid covers nearly one in six low-income U.S. residents.

In the budget year ending Sept. 30, 2007, Medicaid spending totaled $333 billion, with the federal government paying 57% of those costs. As Medicaid enrollment continues to grow, state governors are asking President-elect Barack Obama to increase federal Medicaid spending by $40 billion over two years. The governors say the additional funding will "ease the service cuts or tax increases that legislatures need to balance state budgets," according to the AP/Chronicle.

To date, 19 states have enacted or proposed cuts to Medicaid or SCHIP for the current fiscal year or FY 2010, according to a Families USA survey. For example, Arizona now requires adults to reapply for Medicaid every six months rather than annually, which is expected to reduce enrollment by 4,500 beneficiaries. California requires children to reapply every six months, and the state also might put new applicants for children's coverage on a waiting list. In addition, California Gov. Arnold Schwarzenegger (R) recently proposed changing income eligibility limits for parents from 100% of the federal poverty level to 72%. Nevada eliminated coverage of vision care for adults and limited coverage of personal care services, while South Carolina limited prescriptions and refills to a maximum 31-day supply and Rhode Island has limited coverage for drugs to generics (Freking, AP/San Francisco Chronicle, 12/22).

Broadcast Coverage
NPR's "News & Notes" last week examined the economic recession's effects on the health care system. The segment includes comments from Thomas Lee, associate editor of the New England Journal of Medicine, and Tanyech Walford, a primary care physician (Chideya, "News & Notes," NPR, 12/18).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation.

© 2008 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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