Medicaid is Failing, and Nothing Short of Health-Care Reform Can Fix It

Health-care reform may be stalled in Congress, but you need only look to the overburdened Medicaid program to find evidence of the continued toll the current economic crisis is taking on Americans' ability to afford and access medical care.

At the same time that states are experiencing huge budget deficits, more and more of their residents are unemployed; more and more are joining the ranks of the uninsured and clamoring for Medicaid benefits. The result: Even with emergency federal infusions of funding, state safety nets are being stretched dangerously thin.

On December 1, for example, Tennessee closed enrollment in CoverKids, the state program that provides health coverage to uninsured lower-income children. Despite Gov. Phil Bredesen's promise in 2006 to provide health benefits for "every kid in Tennessee," this year coverage is frozen at 49,000 children; leaving Tennessee's other 150,000 uninsured kids without benefits.

According to Michele Johnson, an attorney with the Tennessee Justice Center, "Tennessee is the last state in the nation that can afford to neglect the health of its children. Infant mortality in Tennessee is worse than in many developing countries, and the rate of infant deaths in Memphis is the worst of any city in America…A state this unhealthy for kids should be striving hard to improve children's health coverage. Instead, Tennessee has just become an island of neglect, in terms of the health of its children."

Tennessee is not alone in limiting health coverage for some of its most vulnerable citizens. In Arizona, Gov. Jan Brewer, struggling with a $1.4 billion deficit this fiscal year (and a projected shortfall of $3.2 billion in fiscal 2011), ordered the state to stop enrolling children in KidsCare, that state's CHIP program that provides coverage for 47,000 children. Brewer has also introduced a ballot measure that would roll back a 10-year-old expansion of Arizona's Medicaid program, resulting in 310,500 -- more than 4 percent of all Arizonans -- losing their coverage.

Meanwhile, Medicaid in Arizona has seen enrollment increase 18 percent from a year ago, while facing the prospect of more than $200 million in cuts for the next fiscal year.

A report by Families USA states that in the current economic climate, more than 1 million people are at risk of completely losing health coverage in Medicaid and CHIP because of cuts that have been enacted or are under consideration in just eight states -- including Arizona, California and Florida. Some 39 states are planning to cut or freeze provider reimbursement rates in 2010 and 15 states have announced benefit cuts and increased cost-sharing; actions that ultimately reduce access to care. According to Kathleen Sebelius, Health and Human Services Secretary, "Every state in the country is looking at a huge gap."

According to the National Association of State Medicaid Directors, states will face a $140 billion budget shortfall in FY 2011. Meanwhile, the group also found that total Medicaid spending increased by an average of 7.9 percent in 2009 as more people became eligible for coverage.

This year, an infusion of $87 billion from the federal government's American Recovery and Reinvestment Act prevented some of the most draconian cuts in state Medicaid programs. This funding is scheduled to expire at various points this year and early in 2011, but the White House announced today that President Obama's budget will include a $25 billion extension of the Medicaid funding program -- giving the states another six months to help keep their programs solvent.

That's good news for the short term. This emergency life-line for Medicaid faces little opposition, even from states like Arkansas, North Carolina and Utah whose legislators fought hard against the program's expansion under health care reform. (Ironically, those same states -- with highest numbers of uninsured and lowest projected cost of Medicaid expansion -- stand to gain the most from reform.)