State financing for Medicaid declined an estimated 2.7% in fiscal 2010 as federal spending for the safety net insurer increased 17.2%, according to the latest
survey by the National Association of State Budget Officers and National Governors Association.
The lopsided growth, the result of $87 billion in federal Medicaid relief for states under the 2009 economic stimulus bill, is expected to reverse sharply in fiscal 2011 as the aid runs out, the survey suggests.
Most states begin fiscal 2011 on July 1 and relief expires six months later. Governors' budget recommendations project state Medicaid spending to increase 7% in 2011 as federal funds drop 1.7%, the survey said. Some states have passed 2011 budgets and include an additional six months of
Medicaid relief, through June 30, 2011, though Congress has not extended the aid.
Meanwhile, Medicaid enrollment is projected to grow 5.4% in the coming year after an estimated 8.3% in 2010 and 6% growth in 2009.
Thirty-two states cut payments to Medicaid providers or planned to do so in 2010 and another 28 made similar proposals for fiscal 2011, the survey found. Fifteen states froze or proposed to freeze payments in 2010 and governors' 2011 budget recommendations for 20 states did the same.
The two-month e-mail survey of governors' state budget officers was completed in May. Figures for 2010 are estimates and 2011 figures are governors' recommended budgets.
