To make up for the loss of extra federal Medicaid spending this June, states have boosted their spending on the program by an average of 29 percent in the current year, according to new data released by the Kaiser Family Foundation Thursday.
The majority of the increase comes from the loss of more than $100 billion in federal stimulus funds, which helped states with the substantial jump in Medicaid enrollment during the economic downturn. However, those federal funds ran out in June, leaving states to carry the burden of covering nearly 60 million people.
According to the foundation’s Commission on Medicaid and the Uninsured, states do not have the means to handle the steep Medicaid cost inflation. As a result, nearly every state has resorted to tough measures to cut costs, such as reducing payment rates to doctors and hospitals, eliminating benefits and increasing the co-payments.
"Unemployment remains high with increasing numbers of poor and uninsured keeping pressure on state budgets and Medicaid programs to meet growing needs," said Diane Rowland, the commission's executive director, CNN reports. "But the cumulative effect of two recessions since 2001 and a decade of constrained spending has left no cushion and many of the latest cuts will hit at the core of the Medicaid program."
