State Fiscal Conditions and Health Coverage: An Update on FY2004 and Beyond

Published: Sep 01, 2003

The Kaiser Commission on Medicaid and the Uninsured released three new reports today on how states are coping with the fourth year of fiscal stress. The third annual survey of the 50 states reveals a far-reaching impact on health coverage for low-income families at a time when enrollment is increasing due to sluggish economic conditions. Some of the findings from the reports include:

Medicaid spending growth slowed for first time in 7 years. For 2003 it was 9.3 percent, down from 12.8 percent in 2002, as states continue to cope with the fiscal crisis.
Over the past 3 years, 50 states have taken action to control drugs costs, 50 have reduced or frozen provider payments, 34 have reduced or restricted eligibility, 35 have reduced benefits, and 32 have increased co-payments.
The primary cause of the fiscal crisis is the falloff in state tax revenue, with the decline in revenue collection being $62 billion, while spending increased about $7 billion in FY2002.
Medicaid spending growth between 2000 and 2002 has been driven in part by enrollment growth due to the economic downturn, as well as continued increases in hospital and prescription drug costs.
Despite slower enrollment growth for the elderly and individuals with disabilities, they accounted for almost 60 percent of Medicaid spending growth during 2000-2002, reflecting their greater use of health care services.

News Release (.pdf)