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The 90 billion dollars in federal financing, included in 2009’s economic recovery package as aid for Medicaid programs, is about to run out at the end of the month, leaving Medicaid programs with less money to provide for a rising number of beneficiaries.

According to The Congressional Budget Office estimates, this will only be the second time in the program’s history that federal Medicaid spending has declined. This decrease is expected to become even larger, as Congress considers further spending cuts to the program. These cuts in federal financing coupled with a sharp increase of those requesting Medicaid assistance is creating severe financial problems for the states.



States have already begun planning for the decrease, with 24 states reducing Medicaid payments to providers and 20 limiting benefits in some other way, according to the National Association of State Budget Officers. New York, for example, has imposed a cap on state Medicaid spending. Other states have also cut budgets for programs such as education and social services to better provide for their Medicaid programs. In California, the federal Medicaid funding cut has caused “very consequential reductions in health care and other public programs,” said Toby J. Douglas, director of the California Department of Health Care Services. Many changes to the state programs are expected in the coming months, as states deal with the Medicaid budget crisis first hand.

Read the New York Times’ article on this Medicaid funding decrease, As Number of Medicaid Patients Goes Up, Their Benefits Are About to Drop.

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