Helping States Keep People Covered, Reduce Costs

In these tough economic times, many Americans have lost access to affordable health care.  When a parent loses a job, takes a pay cut, or even just has to work fewer hours, too often they also lose health coverage for their family.

Since it was enacted in 1965, Medicaid has helped make sure that the most vulnerable Americans – including children, families, the disabled, and senior citizens who are in nursing homes - have access to health care even if they can’t afford it.  Every state operates its own Medicaid program, so you might know it by the state name, such as Medi-Cal in California or TennCare in Tennessee.

Medicaid has played a critical role in protecting low-income families during the recent economic downturn.  In 2010, nearly 53 million Americans relied on Medicaid for access to health care.  And President Obama made sure states had enough money to pay for that coverage by getting Congress to increase federal Medicaid payments for 18 months. As a result, despite a rising number of people enrolling in Medicaid, state spending on the program actually dropped 10% from 2008 to 2009. But this spending expires at the end of June and states are trying to figure out how to cope.

Unfortunately, despite strong signs of economic recovery, states are continuing to struggle to meet their pressing budget challenges while fulfilling their commitment to caring for our most vulnerable citizens.  They are looking for ways to reduce their Medicaid spending without harming their citizens. That is why today, Secretary Sebelius sent a letter to governors outlining new tools and resources that will help them lower costs while continuing to provide high quality care.

In her letter, the Secretary lays out options that States have used in the past to reduce spending and protect coverage for families.  These include:

• Changing certain benefits for people with Medicaid
• Better managing care for the sickest patients
• Purchasing prescription drugs more efficiently
• Reducing waste, fraud and abuse

Our nation’s governors face tough choices, but we know that these flexibilities can help keep many of the 53 million Americans with Medicaid coverage from becoming uninsured. And we are committed to working in partnership with state leaders to find additional ways to adjust Medicaid for the short term while protecting Americans in the long term.

What does this mean for you?  It means that if you have Medicaid coverage, your coverage might change – in many cases for the better, with services offered more efficiently, with higher quality and better coordination.  It also means that your state is going to be able to take the steps needed to improve its programs to continue serving as many people as possible.  Hopefully, these changes will make Medicaid stronger in the future. 

This is important because in 2014, the Affordable Care Act is going to help many more people access health coverage through Medicaid. Starting in 2014, Americans with income up to 133% of the federal poverty line, or about $33,000 for a single mom and her child, will have access to Medicaid.  And the new law provides states with 100% of the funds they need to cover those families. The Act also will allow people in Medicaid to have more choices of health plans so they can find the best match for their needs.  And with the new resources, tools and flexibilities, Medicaid can be better prepared to meet the health care needs into the future for those who rely on it.

Learn more about keeping Medicaid strong.

To find out about your State’s Medicaid program and other insurance options for you, visit finder.HealthCare.gov.