Medicaid bankrupting states, Obamacare making it worse

The so-called fiscal cliff talks in Washington, D.C., might be getting all the attention, but for states, Medicaid is still the biggest budget worry for the coming year, according to a new survey of state legislative directors to be released soon.

Nowhere is the problem larger than in Texas, which faces a $4.3 billion Medicaid deficit. Nine other states likewise are reporting spending overruns for Medicaid and other health care programs for the current 2013 fiscal year, compared with six at this time last year, says the National Conference of State Legislatures. Maine, for example, is seeing Medicaid caseloads go down, but costs rising.

When it comes to budget busters, “Medicaid is the perennial issue that states mention,” says Arturo Perez, NCSL’s fiscal affairs program director, who gave a sneak preview of the survey results during a recent NCSL conference in Washington, D.C.

And while Texas has some $8 billion in its reserve, Ken Levine, director of the Texas Sunset Commission, said at the same meeting that “political reluctance” made it unlikely that lawmakers would dip in that fund to make up the difference. “We are going to have to figure out how to pay for both the existing shortfall,” he says “and the future requirements of Medicaid” under Obamacare.