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This article explores the effects of an economic slowdown on Medicaid, including increased enrollment, budget cuts, and the loss of federal and state funds. It highlights the challenges faced by states in containing Medicaid costs during a recession.
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Health Care and the Economic Slowdown Barbara Coulter Edwards National Association of State Medicaid Directors February 15, 2008
Medicaid By the Numbers • 50 million covered lives • 70% of spending is for the elderly and people of all ages with chronic or disabling conditions • 40% of spending is for people already covered by Medicare • 23% of state budgets • 60/40 is average federal/state funding split
Economy slows Medicaid grows More uninsured Loss of federal + state funds to local economies Budget deficit Cuts to Medicaid: 60% fmap means $2.40 cut in Medicaid to save $1 in state GRF (provider rates, eligibility, benefits)
Economy slows Medicaid grows More uninsured Federal Cuts Loss of federal + state funds to local economies Budget deficit Federal stimulus: FMAP Cuts to Medicaid: 60% fmap means $2.40 cut in Medicaid to save $1 in state GRF (provider rates, eligibility, benefits)
State Actions to Contain Medicaid Costs FY 2002 – FY 2006 Number of States SOURCE: Vernon Smith, Kathleen Gifford, Eileen Ellis, Amy Wiles, Robin Rudowitz and Molly O’Malley, Medicaid Budgets, Spending and Policy Initiatives in State Fiscal Years 2005 and 2006: Results from a 50 State Survey, Kaiser Commission on Medicaid and the Uninsured, October 2005. http://www.kff.org/medicaid/7392.cfm
