Kaiser Family Foundation: Medicaid enrollment, spending rises; growth will continue

WASHINGTON Due to the nation’s deep recession, states experienced rapid growth in their Medicaid enrollment and spending last year and expect additional growth, though at a slower pace, in fiscal year 2011, according to a survey of state Medicaid officials in all 50 states released Thursday by the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured.

States reported an average increase in Medicaid spending of 8.8% across all states in fiscal year 2010, the highest rate of growth in eight years and well above their original projections of 6.3% growth. Medicaid directors attributed the unexpected jump to higher-than-expected increases in eligible families due to the recession, which pushed the national unemployment rate above 10% and even higher rates in some states.

For fiscal year 2011 (which runs through June 2011), states budgeted for an average 7.4% increase in spending above fiscal year 2010 –– a slightly slower rate of growth consistent with their expectations that enrollment growth will slow to 6.1%, according to the annual survey of state Medicaid directors.

The American Recovery and Reinvestment Act of 2009 provided a temporary boost in the federal government’s share of Medicaid costs, providing an estimated $87 billion to states starting in October 2008. ARRA’s increased federal Medicaid support was originally scheduled to end December 2010, but in August, Congress enacted additional relief for states through June 2011 at a reduced level, providing $16 billion over six months.

“The recession swamped state budgets and Medicaid programs, but with the extra federal aid, Medicaid helped millions of additional people as intended during tough times,” stated Diane Rowland, EVP of the Kaiser Family Foundation and executive director of the Kaiser Commission on Medicaid and the Uninsured. “Looking ahead, states will face new challenges as the federal aid winds down and as they prepare for health reform.”

Aseparate KCMU report released Thursday found that Medicaid enrollment increased by nearly 6 million people between the start of the recession in December 2007 and December 2009. In December 2009, 48.5 million people were enrolled in state Medicaid programs, an increase of 1.6 million over June 2009 and 3.7 million over December 2008, an annual growth rate of 8.2%. State-by-state totals included in the Medicaid enrollment report show every state experienced a year-to-year increase.