Medicaid Enrollment Spikes to 48 Million

More people signed up for Medicaid last year than at any time since the program's inception, as the recession wiped out jobs and workplace health coverage.

A report released Thursday by the nonprofit Kaiser Family Foundation found that enrollment in the safety-net medical insurance program jumped to more than 48 million. With the economy barely improving, states are forecasting a 6 percent increase in the rolls next year, meaning another strain on their cash-depleted budgets.

Nearly 6 million people have signed up for Medicaid since the start of the recession in December 2007, according to Kaiser.

Starting in the fall of 2008, the federal government provided more than $100 billion in additional Medicaid funding to help states cover growing numbers of people in need.

The last of that money will run out in June of next year, and states will face a jump of 25 percent or more in their share of costs, although they are still likely to be financially strapped.

"There seems to be no end in sight to the fiscal pressure on the Medicaid program," said Vernon Smith, who co-authored the Kaiser report.

From December 2008 to December 2009, Medicaid enrollment rose by nearly 3.7 million people, the biggest 12-month increase since the early days of the program's implementation, the report found. That accompanied a surge in demand for other low-income assistance programs. Nearly 12 million households received food stamps last year, a record.

Medicaid is a federal-state partnership created with Medicare in 1965 under President Lyndon Johnson. It covers low-income families and many elderly in nursing homes, with Washington paying about 60 percent of the cost on average. Medicaid has also been assigned a major role under the new health care law, which expands the program to cover an estimated 18 million additional low-income adults starting in 2014.

For now, states are cutting Medicaid to try to curb costs.

Nearly every state 48 in all took some action to limit Medicaid spending this year, and most plan more cuts next year. Although they didn't reduce eligibility, Kaiser found that states took steps to restrict the scope of coverage:

A record 20 states placed restrictions on benefits, and 14 plan new restrictions next year. Arizona, California, Hawaii and Massachusetts eliminated some or all dental coverage. Other states limited medical imaging, therapies, supplies and personal care.

Thirty-nine states cut or froze payments to hospitals, doctors and other service providers, and most plan another round next year. Medicaid payment rates are already so low that in many states it's hard to find doctors who will accept the coverage. Yet 20 states lowered payments to doctors this year, and 12 plan to do so next year.

Eighteen states placed limits on long-term care services, and 10 plan additional limits next year.

The recession officially ended in mid-2009, but the Kaiser study indicates its ill effects will take a while longer to wear off. Meanwhile, states will have to gear up for the major Medicaid expansion under the health care law.

"We're on a teeter board," said Carol Steckel, president of the National Association of Medicaid Directors, and head of Alabama's program. "Every now and then that teeter board balances. But it's going to be rare. There's always something else."