States squeezed by recession, growing demand for Medicaid

A deep recession and sputtering economic recovery have left states gasping for air. With tax collections far lower than they were before the recession, states are trying to shrink their budgets. One part they've targeted is the largest part of their budgets, which goes to Medicaid, according to

Already, the number of people enrolled in the state/federal Medicaid program, which provides healthcare for the poor, has grown to an all-time high of more than 48 million people, Stateline reports.

States are finding a number of ways to deal with the financial predicament they find themselves in. Republican governors want the freedom to cut Medicaid without being penalized for dropping enrollees, according to the Wall Street Journal. Under the Affordable Care Act, states that drop enrollees from Medicaid will lose the federal money for most of their Medicaid funding.

Washington Gov. Chris Gregoire, a Democrat, last month proposed a biennial budget that would reverse her priorities. In healthcare, 66,000 working poor would lose their subsidized health insurance. "I hate my budget," she told reporters in December.

Because states are providing healthcare to more people, they are cutting back on the services offered. In Arizona, as FierceHealthcare reported earlier, the state eliminated Medicaid coverage for organ transplants, which means that people on waiting lists for new organs could die because they can't afford to pay out-of-pocket for the operation.

In Illinois, Stateline reports, the state has become a "deadbeat," because it stopped paying bill on time. As a result, some pharmacists who rely heavily on Medicaid payments from the state face bankruptcy or have considered not filing prescriptions for Medicaid patients anymore, a move that could result in higher healthcare spending on the back end.

Lawmakers in other states, such as Nevada and Texas, have considered abolishing Medicaid entirely, a prospect that was unthinkable once upon a time.

To learn more:
- read the Wall Street Journal article
- read the article

Related Articles:
Patients lose organ transplants thanks to state budget cuts
Medicaid cuts mean more struggles for Arizona hospitals
States grapple with severe Medicaid cuts
The red state, blue state Medicaid debate
Pennsylvania hospitals bristle at proposed Medicaid cuts