Transcript Figure 0 From Crunch to Crisis: State Budgets, Medicaid and the Economy Robin Rudowitz Associate Director Kaiser Commission on Medicaid and the Uninsured for Alliance for Health.

Figure 0
From Crunch to Crisis: State Budgets,
Medicaid and the Economy
Robin Rudowitz
Associate Director
Kaiser Commission on Medicaid and the Uninsured
for
Alliance for Health Reform
Washington, DC
February 22, 2010
K A I S E R C O M M I S S I O N O N
Medicaid and the Uninsured
Figure 1
Medicaid Today
Health Insurance
Coverage
Assistance to
Medicare Beneficiaries
Long-Term Care
Assistance
29.5 million children & 15
million adults in low-income
families; 14 million elderly and
persons with disabilities
8.8 million aged and disabled
— 19% of Medicare
beneficiaries
1 million nursing home
residents; 2.8 million
community-based residents
MEDICAID
Support for Health Care
System and Safety-net
State Capacity for Health
Coverage
16% of national health spending;
41% of long-term care services
Federal share ranges 50% to 76%;
42% of all federal funds to states
K A I S E R C O M M I S S I O N O N
Medicaid and the Uninsured
Figure 2
States with Unemployment Rates At Various Levels
in December 2008 and December 2009
Number of States
Unemployment Rate
3 - 6.9%
7 - 9.9%
10 - 14.6%
34
23
17
16
11
1
December 2008
SOURCE: Bureau of Labor Statistics
December 2009
K A I S E R C O M M I S S I O N O N
Medicaid and the Uninsured
Figure 3
State Tax Revenue, 1999-2009
15.9%
15%
10%
5%
0%
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
-5%
-10%
-15%
-11.0%
-9.4%
3 Quarters of Double Digit
Revenue Loss in 2009
SOURCE: Percent change in quarterly state tax revenue, US Census Bureau
-15.6%
K A I S E R C O M M I S S I O N O N
Medicaid and the Uninsured
Figure 4
Impact of a 1% Point Increase in Unemployment on
State Revenues, Medicaid, CHIP & Uninsured
1.0
1%
=
Increase in
National
Unemployment
Rate
Decrease in State
Revenues
1.1
&
3-4%
SOURCE: John Holahan and Bowen Garrett, Rising Unemployment, Medicaid, and the Uninsured,
prepared for the Kaiser Commission on Medicaid and the Uninsured, January 2009.
Increase in
Medicaid and
CHIP
Enrollment
(million)
Increase in
Uninsured
(million)
K A I S E R C O M M I S S I O N O N
Medicaid and the Uninsured
Figure 5
Trying to Respond: ARRA Medicaid Provisions
• Temporary increase in Medicaid FMAP
• Estimated $87 billion in Federal Funds
• Relief for 10/1/08 – 12/31/10
• 3 Components
– Hold harmless
– Base increase 6.2%
– Additional relief for states with high increases in
unemployment
• States cannot restrict eligibility or standards and
must comply with prompt pay requirement
K A I S E R C O M M I S S I O N O N
Medicaid and the Uninsured
Figure 6
How States Used ARRA Enhanced Medicaid
Funding in FY 2009
Total States
Closed or Reduced State General
Fund Shortfall
44
Avoided or Reduced Provider
Rate Cuts
38
Closed or Reduced Medicaid
Budget Shortfall
36
Avoided Benefit Cuts
36
Helped Pay for Increases in
Medicaid Enrollment
Avoided or Restored Eligibility
Cuts
SOURCE: KCMU survey of Medicaid officials in 50 states and DC
conducted by Health Management Associates, September 2009.
33
29
K A I S E R C O M M I S S I O N O N
Medicaid and the Uninsured
Figure 7
Medicaid is an Economic Engine in State Economies
Federal Medicaid
Matching Dollars
—Injection of
New Money—
State Medicaid Dollars
Direct
Effects
Health Care Services
JOBS
Vendors
Indirect
Effects
(ex. Medical Supply Firm)
Employee Income
Induced
Effects
Consumer Goods
and Services
Taxes
K A I S E R C O M M I S S I O N O N
Medicaid and the Uninsured
Figure 8
Total Medicaid Spending and Enrollment Growth
Projected for FY 2009
Actual for FY 2009
7.9%
5.8%
Projected for 2010
7.5%
6.6%
6.3%
3.6%
Total Spending Growth
Enrollment Growth
By the end of 2009, 44 states said spending and
enrollment projections for FY 2010 were too low
SOURCE: KCMU survey of Medicaid officials in 50 states and DC conducted by Health
Management Associates, September 2008 and September 2009. Enrollment data
updated to reflect most recent June to June Enrollment Data from KCMU and HMA.
K A I S E R C O M M I S S I O N O N
Medicaid and the Uninsured
Figure 9
States Imposing Policy Restrictions SFY 2008-2010
Number of States
2008
2009
Adopted for 2010
39
33
21
15
10
7
1
Provider
Payments
0
Eligibility
8
8
12
3
Benefits
NOTE: Past survey results indicate not all adopted actions are implemented. Provider payment
restrictions include rate cuts for any provider or freezes for nursing facilities or hospitals. Eligibility
includes eligibility and application expansions/restrictions.
SOURCE: KCMU survey of Medicaid officials in 50 states and DC conducted by Health Management
Associates, September 2009.
Long Term
Care
K A I S E R C O M M I S S I O N O N
Medicaid and the Uninsured
Figure 10
Outlook
• Budget pressures for states and individuals will persist
even when the economy starts to recover
• States struggling to maintain current programs, but
• Cuts to providers and benefits on the table to meet midyear shortfalls for FY 2010
• Expiration of the ARRA funds mid-way through state FY
2011 could result in deeper cuts to providers and benefits
and eligibility cuts
• Budget driven cutbacks in Medicaid may jeopardize
Medicaid’s role as a strong coverage program for lowincome individuals
K A I S E R C O M M I S S I O N O N
Medicaid and the Uninsured