A surge in demand for Medicaid is draining state coffers just when they can least afford it, a New York Times survey of 40 states reveals. Demand ballooned by up to 10% in many states last year as people lost their employer-sponsored health care with their jobs, and officials believe the need will keep growing with the delayed impact of recent job losses.
Some states running short on funds as tax revenues shrink are cutting benefits and eligibility. Payments to health care providers have been cut in many places, slamming the brakes on efforts to get more doctors to accept Medicaid payments. President Obama and Congressional Democrats are working to include federal aid to state Medicaid programs in the new stimulus package, and may extend eligibility to newly unemployed workers whose jobs didn't have health insurance.