A Painful Recession Findings

Press Release

KEY FINDINGS

Medicaid and CHIP coverage for low-income families is at risk due to enacted and/or proposed cuts.

Nineteen states have enacted or proposed Medicaid or CHIP cuts for fiscal year (FY) 2009 or FY 2010.
- Eighteen of the 19 states enacted program cuts in their FY 2009 budgets.
- Six of the 19 states are already considering a second round of cuts in their FY 2009 or 2010 budgets.
The cuts include 1) actions that will make it harder for new families to get coverage and for those currently enrolled to keep their coverage (cuts in eligibility and enrollment), and 2) actions that will prevent currently enrolled families from getting health care (cuts in provider reimbursement, cuts in benefits, and increases in cost-sharing).

At least a million people will lose coverage.

More than 1 million people are at risk of completely losing health coverage in Medicaid and CHIP because of cuts that have been enacted or that are currently under consideration in the following eight states: Arizona, California, Florida, Georgia, Nevada, Rhode Island, South Carolina, and Tennessee.
- Of those, states estimate that more than one-quarter of a million people (274,800) will lose coverage because of cuts that have already been enacted, and more than three-quarters of a million people (762,980) are at risk of losing their coverage if proposed cuts become law.
- Of those who have lost or are at risk of losing their coverage, more than 590,440 are adults, and more than 447,340 are children.
Three states that were planning to expand coverage are putting those plans on hold because of the economy and uncertainty about CHIP reauthorization. Those states are Iowa, Kansas, and North Dakota.

Millions more will get less health care.

As of November 2008, 13 states have enacted or are considering making reductions in the benefits that are covered by Medicaid or CHIP (see Table 2). Those states are California, the District of Columbia, Florida, Georgia, Maine, Massachusetts, Minnesota, Nevada, New York, Rhode Island, South Carolina, Tennessee, and Utah.
- Benefit cuts vary from state to state. Among those cuts are the following:
  - Loss of access to dental care, vision care, and hearing services for adults in several states.
  - Seniors and people with disabilities in several states will be forced to stay in nursing homes instead of receiving services in the community or in their homes.
The following five states have enacted or are considering increasing the out-of-pocket costs that low-income people must pay for health care in Medicaid or CHIP: California, Georgia, Maine, Rhode Island, and Vermont.
So far, the most common type of Medicaid and CHIP cut that states have made is a reduction in how much providers who participate in the programs are paid for their services. Such provider rate cuts could mean that people enrolled in Medicaid and CHIP will have a harder time finding a health care provider to treat them.
- The following 14 states have enacted or are considering reducing the rates that providers in Medicaid or CHIP are paid: California, the District of Columbia, Florida, Georgia, Illinois, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Hampshire, New York, South Carolina, and Utah.

Increasing federal support for Medicaid and CHIP will provide direct aid to ailing state economies.

An increase in federal funding for Medicaid through a temporary increase in the federal matching rate for Medicaid will have a measurable effect on business activity, jobs, and wages in every state in the country.
- Based on the latest congressional proposal to increase the FMAP (S. 3689, sponsored by Senators Harry Reid and Robert Byrd), the following 10 states would receive the greatest increase in business activity: New York, California, Texas, Pennsylvania, Florida, Illinois, Ohio, Massachusetts, North Carolina, and New Jersey.
- The 10 states that would receive the greatest number of additional jobs because of the temporary FMAP increase are New York, California, Texas, Florida, Pennsylvania, Ohio, Illinois, North Carolina, Massachusetts, and Michigan.
- The 10 states that would receive the greatest increase in wages because of the temporary FMAP increase are New York, California, Texas, Florida, Pennsylvania, Ohio, Illinois, Massachusetts, North Carolina, and Arizona.
CHIP brings in a significantly higher rate of federal matching funds than Medicaid. Therefore, state dollars that are spent on CHIP have an even bigger positive economic impact on state economies.