The Crunch Continues: Medicaid Spending, Coverage and Policy in the Midst of a Recession

This annual 50-state survey finds that number of people on Medicaid and state spending on the program are climbing sharply as a result of the recession, straining state budgets and pressuring officials to curb costs despite increased financial help from the federal government through the American Recovery and Reinvestment Act (ARRA).

The survey finds that these trends are expected to continue well into the 2010 fiscal year, with the slumping economy contributing to the loss of jobs, private health coverage and state tax revenue at a time when more people are seeking help from public programs.

Across the country, states estimate Medicaid enrollment grew by an average of 5.4 percent in state fiscal 2009, the highest rate in six years, surpassing the projected 3.6 percent increase at the start of the year. Similarly, total Medicaid spending growth averaged 7.9 percent in FY 2009, the highest rate in five years, well above the 5.8 percent projected growth. For FY 2010, states estimate Medicaid enrollment will grow by 6.6 percent over FY 2009 levels.

The survey finds that, based on initial legislative appropriations, Medicaid spending across states is expected to grow by an average of at least 6.3 percent in fiscal 2010. But officials in three-fourths of the states are concerned that those appropriations will not be enough, leading to more budget shortfalls and more pressures to trim services and spending.

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