Medicaid enrollment, spending hit state budgets, Kaiser report finds

State budgets are straining under sharp increases in Medicaid enrollment and spending as the worst recession in decades drags on, according to a new 50-state report by the Kaiser Family Foundation.

Medicaid enrollment grew by 5.4% in fiscal 2009, the highest rate in six years, while total Medicaid spending growth averaged 7.9%, the highest rate in five years, according to the report.

Thirty-three states cut or froze provider rates in fiscal year 2009—more than the 22 states that had been expected to do so. And 39 states are slated to cut or freeze rates for fiscal year 2010, according to state Medicaid officials surveyed in August and September for the report.

Federal stimulus dollars helped ease some of the burden. Some $87 billion is available in enhanced Medicaid matching funds through 2010. But states expressed concerns about maintaining coverage when the funding ends in 2011.

The recession has shown “the challenges for states of maintaining coverage when state revenues drop during times of economic crisis,” said Diane Rowland, executive vice president of the Kaiser Family Foundation and the Kaiser Commission on Medicaid and the Uninsured.

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