Survey: Medicaid spending to grow 6.3% in FY10

Results of a nationwide survey released in September by the Kaiser Family Foundation show that the number of people enrolled in Medicaid - and state Medicaid spending - are rising sharply amid the recession.

The increase is straining state budgets and pressuring state leaders to curb costs, despite increased financial help from the federal government, according to a foundation news release.

Across the country, states estimate Medicaid enrollment grew by an average of 5.4 percent in fiscal 2009, the highest rate in six years, surpassing the projected 3.6 percent increase at the start of the year.

Total Medicaid spending growth averaged 7.9 percent in fiscal 2009, the highest rate in five years, well above the 5.8 percent projected growth.

For fiscal 2010, states estimate Medicaid enrollment will grow by 6.6 percent compared to fiscal 2009 levels, fueled by job losses and declines in private health coverage.

Exacerbating the problem, state tax revenues are expected to drop even as more people seek public health with health care amid economic constraints, the release said.

Medicaid spending nationwide is expected to grow by an average of at least 6.3 percent in fiscal 2010.

But officials in 75 percent of the states are concerned that those appropriations will not be enough, leading to more budget shortfalls and more pressures to trim services and spending.

"The recession has shown the importance of Medicaid as a safety net for millions of Americans who have lost health coverage when they have lost their jobs," said Diane Rowland, executive vice president of the Kaiser Family Foundation and executive director of the Kaiser Commission on Medicaid and the Uninsured, in the release.

"But it also has shown the challenges for states of maintaining coverage when state revenues drop during times of economic crisis."

The survey found that 33 states cut or froze provider rates in fiscal 2009, and 39 states are slated to cut or freeze rates for FY 2010.[[In-content Ad]]