Medicaid funding pinch turns into deep bruise

The original $87 billion in Medicaid stimulus funding relieved many cash-strapped Medicaid programs from the need to make catastrophic cutbacks. That funding expires at the end of this year, but Congress may OK President Obama's budget proposal to give states an additional $25.5 billion boost in Medicaid funding through June 2011. This short-term (six-month) extension would provide additional relief. For example, California would expect to gain another $2.1 billion. However, it may not be enough to see all states through their financial crises, reports the American Medical News.

More than a dozen states expect Medicaid spending for fiscal year 2010 (which began in July 2009 for many states) to surpass budgeted amounts, according to a November 2009 survey by the National Conference of State Legislatures. One reason for the overspending is growth in the number of Medicaid enrollees. From October 2008 to September 2009, roughly 2.2 million children enrolled in Medicaid, bringing to the total number of children enrolled in Medicaid/CHIP to almost 40 million. With the Congressional Budget Office projecting unemployment to hover near 9 percent through 2012, a drop in Medicaid enrollment seems dubious at best.

New York offers a case study of the current problems: As of January, New York's Medicaid program had surpassed its fiscal 2010 budget by $100 million, and the deficit could top $400 million by the end of fiscal 2011. The state's Medicaid enrollment hit a record 4.2 million last October.

The latest states to have Medicaid funding woes include Minnesota, Oklahoma and California, according to Kaiser Health News. The Minnesota Hospital Association has joined the growing ranks of state groups actively fighting Medicaid cuts. The association noted that Governor Tim Pawlenty's budget would both slash $347 million in funding and cut 21,500 people from the MinnesotaCare program--moves that would hurt hospitals' ability to support employment in local communities, as well as hindering access to care.

For more information:
- read the American Medical News article
- check out the Kaiser Health News article
- here's the Minnesota Hospital Association's statement