Medicaid Rose as Employment Dipped
The Medicaid health insurance program is designed to provide medical coverage to the poor, so it
should come as no surprise that during the recession of 2007-2009 the number of people using
Medicaid increased dramatically. According to a study released in early May, Medicaid spending during
the recession increased by about 6.6 percent per year. Families made up the largest group of newly
enrolled Medicaid recipients, with an estimated increase of 7.2 percent per year between 2007 and
2010. Prior to that, the yearly increase in enrolling families was only 0.4 percent.
State and federal government spending on the Medicaid program totaled about $330 billion in 2007.
By 2010, that figure had ballooned to about $400 billion. The 6.6 percent per year increase was far
above the 1.3 percent increase that Medicaid costs had risen by in 2005 and 2006.
This increase in Medicaid spending also coincided with a sudden decrease in the amount of revenue
states had. Though the 2009 economic stimulus program provided additional Medicaid funds to states,
that stimulus is now gone and state revenues appear to be recovering more slowly than the increased
costs. Already, Medicaid expenditures account for about one-third of the budget in some states, and
almost all states spend at least one-fifth of their total revenue on Medicaid.
Numerous states, such as Illinois and Arizona, are currently attempting to reduce Medicaid costs by
restricting the number of people who can access the system. At least 20 states have made similar cuts
in their Medicaid programs this year.
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