Medicaid financial issues likely to come to head at governors' conference

This swirl of issues surrounding Medicaid, including increasing enrollments, federal reimbursement for the insurance program, and potential cuts in service, should come to a head at the National Governors Meeting this weekend. The New York Times reports that with a federal stimulus reimbursement bump expected to end in July unless extended, the governors will be lobbying hard to maintain federal reimbursement at its stimulus percentage: 61 percent to 85 percent of costs, rather than past compensation of 50 percent to 76 percent. Many states, struggling with red ink, are considering program or eligibility cuts as enrollment rises.

Data released Thursday by the Kaiser Family Foundation showed an increased Medicaid enrollment of 3.3 million between June 2008 and June 2009, bringing the total number of Americans covered to 46.9 million. Maryland showed the highest increase in Medicare recipients compared with the previous year, with more than a 20 percent jump. Utah, Wisconsin and Florida all showed increases of more than 16 percent; all states showed at least some increase. Because Medicaid enrollment often lags behind unemployment, 2010's increase could prove even greater.

States are considering, and in some instances taking, drastic steps to close budget deficits and maintain medical services, such as:

  • Ohio implementing a hospital tax to send more money to reimburse Medicaid (Georgia is considering similar action).
  • Arizona freezing enrollment in the Children's Health Insurance Program.
  • California considering closing adult day healthcare centers.
  • Michigan, Tennessee, Nevada, and Massachusetts proposing the elimination of some Medicaid benefits, such as restorative dental services.

"During the boom times, legislatures expanded Medicaid pretty significantly," says Robert Laszewski, a health policy consultant. "It's the boom-bust problem."

To learn more:
- here's the Kaiser Family Foundation data
- read this New York Times article
- check out this USA Today article