This report addresses the impact of health care reform and the economic recession on state Medicaid programs.

From the report summary:

As most states faced the beginning of state fiscal year 2010, the two major forces now affecting states and their Medicaid programs were: the effects of the economic downturn and the federal health reform discussions that would include a greater role for Medicaid. Jointly financed and administered by the federal government and states, Medicaid provides affordable and comprehensive health and long-term care coverage to 60 million low-income Americans. This brief provides insights from discussions with leading Medicaid directors, from June 2009.

• The recession is having a major effect on state Medicaid programs.
• The American Recovery and Relief Act of 2009 (ARRA) has been pivotal in helping states address budget shortfalls, avoid or soften Medicaid program cuts and preserve eligibility.
• As the recession worsens there is an intense focus on Medicaid cost containment and significant Medicaid cuts are on the table.
• States see health reform as critical, but have concerns.

Serious economic conditions persist at the state level which will cause Medicaid enrollment to continue to rise. Enhanced federal Medicaid funds from ARRA have been key in helping states to address shortfalls and preserve Medicaid eligibility. Even as the economy starts to turn around, the effects on unemployment and Medicaid enrollment will lag behind and continue to rise at the same time that ARRA funds will expire resulting in further pressures on state budgets. While states struggle to maintain coverage, their ability to finance their current programs is in jeopardy and questions remain about any new financing responsibilities that states will face as a result of federal health reform discussions.

Full report: The Recession and National Health Reform Dominate State Medicaid Concerns Going into FY2010 (PDF | 502KB)

The Henry J. Kaiser Family Foundation & The Kaiser Commission on Medicaid and the Uninsured. (2009).  Struggling with financing: the recession and national health reform dominate state Medicaid concerns going into FY2010.