Tuesday, April 29, 2008 Coverage
& Access
Number of Uninsured U.S. Residents Projected To
Rise by 1.1M for Each Percentage Point Increase in Unemployment Rate,
Could Strain Public Programs, Analysis Shows
For every one point rise in the U.S.
unemployment rate, the number of uninsured is projected to increase by 1.1
million people, according to a Kaiser Family Foundation Commission on
Medicaid and the Uninsured analysis released Tuesday, the New York Times reports (Sack,
New York Times, 4/29). The report, conducted by researchers at the
Urban Institute's Health Policy Center, also examined the effect that a
one-percentage-point rise in the national unemployment rate would have on
state Medicaid and SCHIP programs (Francis, "Health Blog," Wall Street Journal, 4/28). In
addition to the increase in the number of uninsured, the analysis projects
that for every percentage-point increase in unemployment:
- Medicaid and SCHIP enrollment would increase by
600,000 children and by 400,000 nonelderly adults;
- Enrollment jumps in Medicaid and SCHIP would
cost an additional $3.4 billion, of which $1.4 billion states would be
required to pay; and
- State general fund revenues would drop by 3% to
4%, likely leading to budget cuts.
According to the
researchers, "Because of state balanced-budget requirements, Medicaid and
other assistance is most likely to be cut when state residents have the
greatest need for help." According to the
New York Times, 27 states
and Washington, D.C., are forecasting budget deficits for fiscal year
2009, and cuts to Medicaid or SCHIP programs have been proposed in 13
states.
Meanwhile, the unemployment rate has increased by
seven-tenths of 1% since March 2007. According to Urban Institute Director
of Health Policy John Holahan, job losses often accelerate late in a
recessionary cycle, meaning the "heaviest hit is still likely to come."
Holahan said the projections would be in addition to the enrollment growth
normally expected from increasing health insurance costs and the erosion
of employer-sponsored coverage. Researchers also said that the impact of
the current economic downturn might be worsened by its proximity to the
recession in 2001. "You could have more people at the tipping point so we
could be underestimating things a little bit," Holahan said. "This is
emerging as a pocketbook issue, and not just as an issue of moral
principle or access to care," Drew Altman, president and CEO of the
Foundation, said (
New York Times, 4/29).
Researchers
said the federal government could increase all Medicaid funds temporarily;
target federal spending increases to specific states based on need; or
allocate funds discriminatingly to states meeting certain criteria, either
for a limited time or with a formula that would be implemented during
future economic downturns ("Health Blog,"
Wall Street
Journal, 4/28).
The
report is available
online.
Issue Brief
KCMU also released an accompanying issue brief
that analyzes results from its annual 50-state budget surveys of Medicaid
directors from 2003 to 2007. The analysis describes how states adopted a
variety of Medicaid cost containment strategies during the last economic
downturn and how the federal government provided assistance to prevent
deeper Medicaid budget cuts (Kaiser Family Foundation release, 4/29).
During this period, the federal government provided $20 billion to states,
some of which was given on the condition that they not tighten Medicaid
eligibility rules and that they use several techniques to reduce costs.
According to KCMU, with "another economic downturn coming so
quickly after the last one, states may have fewer policy options to
control spending this time" ("Health Blog," Wall Street
Journal, 4/28).
The
issue brief is available online.
A kaisernetwork.org
webcast of an interview by Kaiser Family Foundation Vice President Jackie
Judd with Barbara Edwards, interim director of the National Association of State
Medicaid Directors, about the impact of the economic downturn and the
Bush administration's proposed new Medicaid rules on programs across the country is available online.