This fact sheet discusses the status of Medicaid and state budgets in light of the continuing recession and the federal fiscal relief provided to state Medicaid programs through the American Recovery and Reinvestment Act (ARRA). The ARRA money has proved to be critical in helping states address budget shortfalls, preserve Medicaid eligibility and soften program cuts. But ARRA funds are set to expire on Dec. 31, 2010, creating a major cliff in state financing that may prompt some states to turn to cost-saving measures such as restrictions on Medicaid eligibility. Any erosion in Medicaid could complicate health reform plans that call for expanding Medicaid in an effort to achieve broader coverage.

Fact Sheet (.pdf)