This fact sheet by the Kaiser Family Foundation explores the current fiscal problems of the states and how these may have an effect on Medicaid.

From the fact sheet:  

Demand for Medicaid increases when the economy is weak, driving up enrollment and costs just as state budgets tighten. This fact sheet, updated to include information from the foundation’s recent 50-state Medicaid budget survey, summarizes the relationship of Medicaid with state budgets and discusses the current fiscal situation in the states and how it is affecting Medicaid programs.

Fact Sheet: State Fiscal Conditions and Medicaid (PDF | 258 KB) 

Kaiser Family Foundation. (2010). State fiscal conditions and Medicaid.