Healthcare safety nets kept intact with help from Washington

Bolstered by billions of dollars in aid from Washington, states managed to hold their healthcare safety nets together last year despite the fallout from the recession, a new survey shows.

Several states actually expanded coverage for poor children and adults, using Medicaid and the Children’s Health Insurance Program to prevent more Americans from losing insurance in the economic downturn, according to the report by the Kaiser Commission on Medicaid and the Uninsured.

Now, however, with emergency federal aid scheduled to end this year, it is unclear how much longer financially strained states will be able to head off cutbacks.

Republican governors, many of whom have criticized the new healthcare law’s dependence on Medicaid to guarantee all Americans coverage, are pushing the Obama administration for permission to cut their programs.

“It’s killing education and other important things,” said Indiana Gov. Mitch Daniels, a Republican. “Medicaid is important, but it is not the only important thing state governments do.”

Even some Democrats are contemplating ways to scale back. This week, newly elected California Gov. Jerry Brown proposed $1.7 billion in cuts to the state’s Medi-Cal program, including new limits on prescription drugs and doctor visits.

Driven by poverty and expanded eligibility, enrollment in Medicaid — a state-federal insurance program — surged to 47.8 million in 2009.

It now includes nearly 1 in 6 Americans, according to the most recent census data. By comparison, just 1 in 12 Americans were enrolled in the program in 1987.

The Medicaid expansion — coupled with growth in the CHIP program for children in low- to moderate-income families — meant that more than 90% of children had health coverage in 2010.

“States provided much-needed coverage and peace of mind to families while they looked for jobs and struggled to pay the bills,” said Tricia Brooks, a senior fellow at the Georgetown University Center for Children and Families and coauthor of the new report.

“Without Medicaid and CHIP, the uninsured rate, which reached a record 50 million [people], most certainly would have been higher,” she said.

Maintaining those two programs was possible in large part because of about $103 billion in assistance that Congress made available to help states shore up their Medicaid programs, starting with the economic stimulus bill passed in early 2009.

(Medicaid programs are jointly funded by federal and state governments using a complex formula that varies from state to state).

Brooks and other experts also think that the safety net weathered the recession because the enhanced federal aid required that states not narrow eligibility for Medicaid, though they were allowed to pare back some benefits.

The new healthcare law continues that requirement until 2014, when Medicaid will be opened to poor adults as well as children.

But the extra money from Washington is set to run out in June, forcing many state leaders to contemplate a new round of cuts.

noam.levey@latimes.com