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Medicaid covered a record 42.4 million people in 2003, up 3.9% from 2002, despite predictions that budget deficits would make states reduce Medicaid coverage. This was triple the population growth rate, according to figures from the Centers for Medicare & Medicaid.

The agency said it expects enrollment to grow 2.1% in 2004, the slowest rate since 1999.

Texas made the largest cuts in 2003, with analysts predicting that 142,000 people will be dropped from Medicaid in 2004. Experts acknowledge, however, that predictions have not always hit the mark in the past. California, for example, predicted that 543,000 residents would lose coverage in 2003, but instead Medicaid enrollment grew by 3.4%.