Exclusive: States Facing Massive Medicaid Budget Crunch

Across the country, states faced with massive budget gaps are looking for ways to slash Medicaid spending. Combined, states are looking at a $125 billion shortfall in fiscal year 2012 — which begins in July 2011 for most states — and are considering major cuts to many government programs.

But Medicaid makes a particularly fat target. States estimate that the program will cost them $195 billion in 2012, according to projections that they gave the federal government in November. That’s up 48 percent from what they spent in 2010 budgets.

The states face a double-pronged problem.

Four years of recession have shrunk state budgets and added to the Medicaid rolls. More people are unemployed and lacking health insurance, and need to rely on the government’s insurance program for the poor.

For the past several years, though, states have had some extra help in dealing with the Medicaid influx. State and federal governments split the tab for Medicaid, and in 2009, as part of the stimulus bill, the federal government increased its share of Medicaid spending. But that federal help expires in July, and states are scrambling to make up the difference.

Almost every state is required, in its constitution or otherwise, to have a balanced budget. So any budget shortfall — expenses greater than the revenue that the state expects to take in — must be closed when the state adopts a budget, through cutting spending, raising taxes or other measures.

In a PBS NewsHour exclusive, use the graphics above to see just how much all 50 states and the District of Columbia expect Medicaid spending to increase in 2012, as compared with spending in 2010, when the federal stimulus help was still in place. The graphic also shows the size of the budget gap that each state expects to have to close.* The data come from the Center for Medicare and Medicaid Services, Kaiser Family Foundation and the U.S. Census Bureau and the Center on Budget and Policy Priorities.

*Updated Friday, February 18, 1 p.m.: A further detail about the state projected budget gaps. Some of the states in the graphic list the projected budget gap as N/A. This category includes both states that have indicated they will not have a budget shortfall (North Dakota, Wyoming, Arkansas, and Alaska) and those that have indicated that they will have a shortfall but have not indicated how large it will be (New Hampshire, Tennessee, Washington, D.C. and Alabama).

Travis Daub, Sarah Clune and Hari Sreenivasan contributed to this report.