Health Care and the Economic Slowdown

Barbara Coulter EdwardsNational Association of State Medicaid Directors February 15, 2008

Medicaid By the Numbers 50 million covered lives 70% of spending is for the elderly and

people of all ages with chronic or disabling conditions

40% of spending is for people already covered by Medicare

23% of state budgets 60/40 is average federal/state funding split

Economy slows

Medicaid grows

Budget deficit

Cuts to Medicaid:60% fmap means $2.40 cut in Medicaid to save $1 in state GRF (provider rates, eligibility,benefits)

Loss of federal + state funds to local economies

More uninsured

Economy slows

Medicaid grows

Budget deficit

Cuts to Medicaid:60% fmap means $2.40 cut in Medicaid to save $1 in state GRF (provider rates, eligibility,benefits)

Loss of federal + state funds to local economies

More uninsured FederalCuts

Federal stimulus: FMAP

State Actions to Contain Medicaid Costs FY 2002 – FY 2006

32

22

8 9

4

117

4650

25

18

1310

2018

14

7 8

26

1014

1613

25

1517

5048

1921

50

8

4341

50

ControllingDrug Costs

Reducing/FreezingProvider

Payments

Reducing/RestrictingEligibility

ReducingBenefits

IncreasingCopayments

DiseaseManagement

Long-TermCare

Implemented 2002 Implemented 2003 Implemented 2004 Implemented 2005 Adopted for 2006

SOURCE: Vernon Smith, Kathleen Gifford, Eileen Ellis, Amy Wiles, Robin Rudowitz and Molly O’Malley, Medicaid Budgets, Spending and Policy Initiatives in State Fiscal Years 2005 and 2006: Results from a 50 State Survey, Kaiser Commission on Medicaid and the Uninsured, October 2005. http://www.kff.org/medicaid/7392.cfm

Number of States