Governors’ Budgets for FY 2013 — What is Proposed for Medicaid?

This report provides Medicaid highlights from governors’ proposed state budgets for FY 2013, which starts July 1, 2012 for most states. While some states are beginning to see signs of economic recovery, many remain cautiously optimistic as they continue to experience the recession’s lingering effects. State revenues have not rebounded to pre-recession levels, unemployment rates are still high, and some states continue to face budget shortfalls. There continues to be high demand for Medicaid and other safety net programs, and higher spending and enrollment from the increased demand for services continues to stretch limited state resources.

Thus far, much of the legislative budget discussion has focused on the scope of proposed cuts. Governors have proposed a wide range of Medicaid cost containment measures, including significant cuts in eligibility and benefits for some groups, increased use of care management, and greater use of technology to streamline enrollment processes and find efficiencies. At the same time, many states are preparing for the Affordable Care Act coverage expansions and implementation of state Exchanges and are taking advantage of opportunities for federal financial support to make changes. In a few states some lawmakers have discussed restoring funding to Medicaid for Medicaid services that have endured severe cuts in previous years because of large budget shortfalls. State Budgets will be analyzed in greater detail in the Kaiser Commission on Medicaid and the Uninsured’s annual 50-state Medicaid budget survey, to be released in the fall of 2012.

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