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The Medicaid Money Squeeze
States Turn to Feds for Help with Rapidly Rising Medicaid Costs
April 2002 -- It's the rare state these days that's not having a budget crisis. Education consumes the largest share of state money. But the second largest line item in most states is the Medicaid health program for the poor.
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Medicaid accounted on average for more than 20 percent of states' budgets in 2002, making it second only to education.
Graph: National Association of State Budget Officers
See a detailed enlargement. |
Medicaid covers 44 million Americans, providing everything from pre-natal to nursing home care. But its rapidly rising costs are swamping state budgets.
Compounding the problem, states are getting less money from the federal government.
In a series of reports, NPR looks at how some states are trying to cope -- and what kind of action they say Washington needs to take.
Kentucky
Medicaid spending rose 11 percent last year nationwide, and more in some states, including Kentucky. There, the situation is so serious that the governor, Democrat Paul Patton, came to Washington last month to ask Congress for help. The problem, says Patton, can be outlined using simple arithmetic. Kentucky's Medicaid costs rose 47 percent in the past six years. That was a jolt even when the state was doing well financially. Now that the state's economy is lagging, Medicaid increases of that magnitude are unsustainable.
For All Things Considered, NPR's Julie Rovner reports. April 10, 2002. Listen.
Mississippi
Few if any states are planning Medicaid reductions as drastic as Mississippi, where 22 percent of the state's population is dependent on the program for health care. State Medicaid officials say they will be forced to cut drug prescriptions in half and disqualify most Medicaid patients in nursing homes as of July 1, 2002, to balance the budget.
That could result in serious health complications for recipients with multiple illnesses, and it could mean the closing of all nursing homes in the state. Eighty percent of nursing home residents in Mississippi have their bills paid by Medicaid, and operators say they can't stay in business with the small portion of paying patients who would remain after these cuts.
For Morning Edition, NPR's David Molpus reports. April 11, 2002. Listen.
Oregon
When it comes to innovation, Oregon has often lead the way on social, environmental and health care matters. The state was the first to vastly expand health care coverage for the poor under the federal Medicaid program.
The Oregon health plan is unique. In 1994, the state set up an explicit rationing system. It took the health care services normally covered by Medicaid and ranked them in order of importance. Using Medicaid dollars, the state would pay for services at the top and middle of the list, but not those near the bottom.
The money saved by reducing some benefits would be used to provide health care for more low-income and disabled residents. Now, while other states are talking about cutting Medicaid, Oregon has a plan to expand it.
For Weekend All Things Considered, NPR's Wendy Kaufman reports. April 14, 2002. Listen.
Michigan
Last year, Michigan's drug costs for Medicaid patients reached $1 billion. In an effort to rein in those costs, the state has embarked on a program which requires steep discounts from pharmaceutical companies if they want their products on a preferred drug list. Many doctors say the state is choosing price over quality -- and that low-income patients will suffer in the long run.
For Morning Edition, NPR's Jackie Northam reports. April 23, 2002. Listen.
In Depth
 Browse for other NPR stories about Medicaid.
Resources
• Read a National Association of State Budget Officers report: Medicaid to Stress State Budgets.
• At a recent National Governors Association meeting, members called for a new federal commission on Medicaid reform. Read a news release and the NGA's position on Medicaid.
• Read the NGA report: Making Medicaid Better.
• Get an analysis of the Bush administration's proposed Medicaid changes at George Washington University's Center for Health Services Research and Policy. (PDF requires Adobe Acrobat Reader download.)
• Read a report on Medicaid reform, published in the Feb. 21, 2002 edition of the New England Journal of Medicine. (PDF requires Adobe Acrobat Reader download.)
• Find more on Medicaid issues at the Kaiser Family Foundation Web site.
• Visit the federal government's Centers for Medicare & Medicaid Services Web site.
• Find a list of state Medicaid Web sites at the National Association of State Medicaid Directors Web site.
• Find Medicaid toll-free numbers by state.
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