States scrambling to address Medicaid costs due to reduction in federal funding

A recent article on CNNMoney discusses how states are bracing for an impending cut in federal funding for Medicaid. Due to the American Recovery & Reinvestment Act, states received an average of $2.68 for every dollar they spent on Medicaid. This was up from the original funding level of $1.61, according to the figures provided by the Council of State Governments. Federal funding for the program is decreasing incrementally until July 1st, when funding will reach pre-stimulus levels.

With current enrollment rates at nearly 49 million or almost 1 in 6 people, states are looking to address the shortfall by enrolling program participants into managed care programs, eliminating or charging for certain services and slashing rates to providers.