States stagger under weight of Medicaid growth, new Kaiser reports find

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As Medicaid enrollment grows at unprecedented rates, many state governments are trimming “optional” services for enrollees, according to a handful of new reports released Thursday by the Kaiser Family Foundation.

Medicaid enrollment increased in every state between 2008 and 2009, according to Kaiser's December 2009 Data Snapshot. Nationwide, enrollment rose by nearly 3.7 million, or 8.8%. This is the largest one-year enrollment increase since the program began in the 1960s. The increased enrollment has resulted in an average 8.8% increase in spending by states on the low-income health program.

At the same time, 20 states have reduced benefits. At least 39 states have also frozen reimbursements for physicians and hospitals, and 14 states plan to continue freezes through 2011, according to a Kaiser survey of state Medicaid officials. States continue to grapple with significantly reduced tax revenues across the country as a result of the economic downturn.

The Kaiser survey also finds that many states are still shifting Medicaid resources away from nursing home and skilled nursing facility care and toward home- and community-based services, but the trend has slowed in the last year. A total of 32 states expanded long-term care services in 2010, but mostly in the HCBS field. That compares to 42 states in 2008.