Recession Fuels More Enrollees, Financial Troubles for State Medicaid

BY Betty Ann Bowser  February 19, 2010 at 4:30 PM EST

Since its founding in 1965, Medicaid has served as a health insurance safety net for people living at or below the federal poverty level: the nation’s poorest children, pregnant women, people with disabilities, and senior citizens with low incomes living in nursing homes.

Last year, the recession fueled the biggest increase in Medicaid enrollment in the history of the program. More than 3 million people signed up for the program by June of last year, according to a new report by the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured. That means that enrollment in Medicaid has reached a record 46.8 million people nationwide.

Maryland saw its caseload increase 20 percent between June 2008 and June 2009, the biggest increase of any state in the country. And the District of Columbia, next door, saw thousands more people enroll in Medicaid that the local government had anticipated. It was the same in 43 other states. (USA Today as a graphic of the percentage increase by state.)

This comes at a time when state government tax revenue has been dwindling, and budgets across the country are in severe distress. And since Medicaid is a big-ticket item in state budgets, 29 states are now looking at how to cut money to doctors and hospitals and how to drop entire programs, like eye glass coverage, dental benefits, hearing aids and dentures for seniors, according to the report.

Arizona officials are considering eliminating Medicaid coverage for 310,000 adults and ending the state’s Children’s Health Insurance Program for low-income children altogether.

In Tennessee, the most substantial cuts in the history of the Medicaid program are on the table. Officials there want to put a $10,000 dollar cap on services for non-pregnant patients when they’re in the hospital, and limit the number of X-rays, lab procedures and doctor’s office visits for most people on Medicaid.

Things are so bad in Nevada that officials there are considering a reduction in the number of diapers provided each month to incontinent adults from 300 to 186. “We are now down to the list of ugly options,” Nevada’s director of health and human services, Mike Willden, told a state legislative committee last week, according to the New York Times.

In many states, Medicaid already pays doctors and hospitals less money than they get from Medicare or private insurance companies. It is not unusual for providers to be reimbursed at levels below their actual costs. Because of that a growing number of doctors won’t take on Medicaid patients, and that is making it even harder for patients to find doctors to treat them.

One doctor in Wichita told the Times that he has informed his Medicaid patients that he can no longer afford to see them. “I’m out of here. I’m done,” Dr. C. Joseph Beck said. Over the past eight months the doctor says his practice had to write off $36,000 in losses based on low government reimbursements from Medicaid.

Dr. Beck said he didn’t want to take such drastic action. “I want to take care of people,’ he told the paper. “But I also have three children and many employees to take care of.”

Right now states who agree not to tighten eligibility requirements for Medicaid participation are getting temporary help from Washington in the form of millions of dollars from the federal government’s stimulus package. But those dollars run out at the end of 2010 and right now no one knows if they will be extended.

Meanwhile, over the weekend the president is expected to post his package of proposals for health care reform online, in advance of the special White House summit on health care scheduled for next week on Feb. 25. Expected in the revised version is an expansion of the already financially troubled Medicaid program, which insiders say the president wants to offer to 15 million Americans who currently have no health insurance.