K A I S E R C O M M I S S I O N O N Medicaid and the Uninsured Figure 0 From Crunch to Crisis: State Budgets, Medicaid and the Economy Robin Rudowitz Associate Director Kaiser Commission on Medicaid and the Uninsured for Alliance for Health Reform Washington, DC February 22, 2010

K A I S E R C O M M I S S I O N O N Medicaid and the Uninsured Figure 1 Medicaid Today Health Insurance Coverage 29.5 million children & 15 million adults in low-income families; 14 million elderly and persons with disabilities State Capacity for Health Coverage Federal share ranges 50% to 76%; 42% of all federal funds to states MEDICAID Support for Health Care System and Safety-net 16% of national health spending; 41% of long-term care services Assistance to Medicare Beneficiaries 8.8 million aged and disabled 19% of Medicare beneficiaries Long-Term Care Assistance 1 million nursing home residents; 2.8 million community-based residents

K A I S E R C O M M I S S I O N O N Medicaid and the Uninsured Figure 2 States with Unemployment Rates At Various Levels in December 2008 and December 2009 SOURCE: Bureau of Labor Statistics Number of States Unemployment Rate December 2009December 2008

K A I S E R C O M M I S S I O N O N Medicaid and the Uninsured Figure 3 State Tax Revenue, SOURCE: Percent change in quarterly state tax revenue, US Census Bureau -9.4% 15.9% -15.6% -11.0% 3 Quarters of Double Digit Revenue Loss in 2009

K A I S E R C O M M I S S I O N O N Medicaid and the Uninsured Figure 4 Decrease in State Revenues SOURCE: John Holahan and Bowen Garrett, Rising Unemployment, Medicaid, and the Uninsured, prepared for the Kaiser Commission on Medicaid and the Uninsured, January 2009.Rising Unemployment, Medicaid, and the Uninsured 1% Increase in National Unemployment Rate = Increase in Medicaid and CHIP Enrollment (million) Increase in Uninsured (million) & Impact of a 1% Point Increase in Unemployment on State Revenues, Medicaid, CHIP & Uninsured 3-4%

K A I S E R C O M M I S S I O N O N Medicaid and the Uninsured Figure 5 Temporary increase in Medicaid FMAP Estimated $87 billion in Federal Funds Relief for 10/1/08 – 12/31/10 3 Components –Hold harmless –Base increase 6.2% –Additional relief for states with high increases in unemployment States cannot restrict eligibility or standards and must comply with prompt pay requirement Trying to Respond: ARRA Medicaid Provisions

K A I S E R C O M M I S S I O N O N Medicaid and the Uninsured Figure 6 How States Used ARRA Enhanced Medicaid Funding in FY 2009 SOURCE: KCMU survey of Medicaid officials in 50 states and DC conducted by Health Management Associates, September 2009.

K A I S E R C O M M I S S I O N O N Medicaid and the Uninsured Figure 7 Medicaid is an Economic Engine in State Economies State Medicaid DollarsFederal Medicaid Matching DollarsInjection of New Money Health Care Services Vendors (ex. Medical Supply Firm) Direct Effects Employee Income Indirect Effects Consumer Goods and Services Taxes Induced Effects JOBS

K A I S E R C O M M I S S I O N O N Medicaid and the Uninsured Figure 8 Total Medicaid Spending and Enrollment Growth SOURCE: KCMU survey of Medicaid officials in 50 states and DC conducted by Health Management Associates, September 2008 and September Enrollment data updated to reflect most recent June to June Enrollment Data from KCMU and HMA. By the end of 2009, 44 states said spending and enrollment projections for FY 2010 were too low

K A I S E R C O M M I S S I O N O N Medicaid and the Uninsured Figure 9 States Imposing Policy Restrictions SFY Number of States SOURCE: KCMU survey of Medicaid officials in 50 states and DC conducted by Health Management Associates, September NOTE: Past survey results indicate not all adopted actions are implemented. Provider payment restrictions include rate cuts for any provider or freezes for nursing facilities or hospitals. Eligibility includes eligibility and application expansions/restrictions.

K A I S E R C O M M I S S I O N O N Medicaid and the Uninsured Figure 10 Outlook Budget pressures for states and individuals will persist even when the economy starts to recover States struggling to maintain current programs, but Cuts to providers and benefits on the table to meet mid- year shortfalls for FY 2010 Expiration of the ARRA funds mid-way through state FY 2011 could result in deeper cuts to providers and benefits and eligibility cuts Budget driven cutbacks in Medicaid may jeopardize Medicaids role as a strong coverage program for low- income individuals