Forty-six states plan to curb Medicaid spending in fiscal year 2011, 14 states will implement restrictions on Medicaid benefits, and 37 states will resort to provider rate cuts or freezes.
The sluggish economy and the nationwide recession were responsible for an 8.8 percent increase in Medicaid spending in fiscal year 2010, and an increase in Medicaid enrollment of over six million. As of December 2009, 48.5 million Americans were on Medicaid.
Federal Medicaid spending was propped up by $87 billion in aid beginning October 2008 due to the American Recovery and Reinvestment Act of 2009 (ARRA). Starting in December 2010, however, Congress will cut down on Medicaid relief, allocating only $16 billion for six months.
“The recession swamped state budgets and Medicaid programs, but with the extra federal aid, Medicaid helped millions of additional people as intended during tough times,” said Diane Rowland, executive vice president of the Kaiser Family Foundation and executive director of the Kaiser Commission on Medicaid and the Uninsured, in a statement.
“Looking ahead, states will face new challenges as the federal aid winds down and as they prepare for health reform.”
