In the past year, states have experienced significant pressure on their Medicaid programs as enrollees increased by 5.4 percent nationwide — the largest increase in six years. At the same time, tax revenue for states has dropped, according to the report. Some states were forced to reduce benefits as a result, which may have been more dramatic if not for the distribution of federal funds to support Medicaid to states as part of the stimulus packages, according to the report.
Acceptance of the federal funds prohibited states from reducing the number of enrollees. According to the report, 29 states reported that they would have cut eligibility if they were not prohibited from doing so as a condition of accepting the funding.
Federal funding for Medicaid under the stimulus will expire on Dec. 31, 2010, and analysts do not expect state revenues to rebound enough to make up for the loss of federal funds. As a result, states may need to make drastic cuts to Medicaid eligibility and reimbursement rates in order to continue to fund the programs, according to the report.
Current healthcare reform bills would also impact Medicaid by expanding coverage to anyone earning 133 percent or less than the federal poverty level. Although this expansion would be paid for with federal funds, states that have already expanded Medicaid, such as New York, would receive less federal support, according to the report.
Read the AMNews’ report on Medicaid reimbursement declines
