Even though the recession may be shallow and in the process of ending, state revenues have declined and are almost universally below amounts previously budgeted. This means that states are looking to reduce expenditures across the board--including Medicaid costs, which average about 15% of state budgets.
At the same time, unemployment is rising, creating demand for more government spending as large numbers of Americans become eligible for state assistance, including Medicaid.
The nation's unemployment rate stood at 5.6% at the end of January, corresponding to about 7.9 million people. By comparison, only 4% of the workforce was unemployed in December 2000.
See print publication for the following charts/tables: Hospital, HMO, e-healthcare connectivity and PPM indexes compared with the S&P 500; Medicaid Squeeze; Healthcare service companies' change in market capitalization; Projected growth in 2002 Medicaid enrollment; Projected growth in 2002 Medicaid spending