Medicaid Program Sees Highest One Year Increase In 40 Years

Our guest blogger is Emma Sandoe, a Health Care Researcher at the Center for American Progress Action Fund.

An additional 3.28 million Americans enrolled in the Medicaid program for low income individuals last year, as the economic recession shifted many individuals from employer sponsored coverage to public programs — a trend that further underscores the need for health insurance reform.

A report from the Kaiser Family Foundation shows that enrollment has grown during each six month period since the beginning of the recession. Nationwide the Medicaid program saw a 7.5 percent increase from 2008 to 2009 and Maryland saw a dramatic 20 percent increase. Maryland Medicaid director, John Folkemer said a majority of the increase “was because of the economy.

A report issued last year found for every one percent increase in national unemployment, an estimated one million more enroll in the Medicaid and SCHIP program and 1.1 million increase in the uninsured. Unlike other public programs, the rise in the numbers enrolling in Medicaid is largely due to job loss since a majority of health insurance is tied to employment.

The rise in enrollment is crippling the states who are already facing lower revenues due to the economic downturn. The stimulus bill passed last year enhanced the federal share, or FMAP, of the cost in order to alleviate the burden on states, but the increase is expected to expire at the end of the year. States have grown to depend on the increased FMAP to ensure this safety net is available for the lowest income individuals.

Recently, some state legislatures have been pushing hard against health care reform, but reform will benefit states and their Medicaid programs. The health care reform bill contain a variety of incentives to help states maintain an increased federal matching rate. If states allow enrollees to participate in medical home projects, engage in prevention programs, and encourage non-institutionalized long-term care programs the states will see more federal dollars in their Medicaid program. The expansion of the Medicaid program to cover 133 percent of the federal poverty level is fully funded by the Federal government through 2016.

The exchange can also act to stabilize the health insurance marketplace. Subsidies and a competitive marketplace within the exchange can keep insurance more affordable. Since health, by nature, is unpredictable, coverage is not a luxury item that can be eschewed during economic decline. By allowing individuals to maintain health care coverage and taking steps to prevent medical bankruptcy, health care reform would enable residents to weather economic storms such as the one we are currently facing.