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Weekly wrap: Rising Medicaid bill a growing concern for states

New Mexico may foreshadow a Medicaid crisis facing states next year as the federal economic stimulus money dwindles.

During a recent PowerPoint presentation by New Mexico Human Services Secretary Pam Hyde to state lawmakers, she said the state’s Medicaid program could be facing a shortfall of up to $300 million by 2011 unless costs are contained. The stimulus money will be gone by then, she stressed in an interview with The New Mexico Independent.

The Medicaid problem is on top of New Mexico’s ongoing fiscal pressures. Less than two months into the new fiscal year, the state has a separate $400 million budget gap due to tax revenue that has plunged deeper than projected. That has prompted Gov. Bill Richardson (D) and legislative leaders to plan a special session in October.

One in four New Mexico residents gets some form of state-financed health care. A $300 million Medicaid gap would ensure cuts “much more drastic than we’ve had to do in the past,” Hyde said. Like many states, New Mexico used its stimulus money this year to help close a shortfall.

Other states may have the same Medicaid challenge.

A new report shows that, in July, 69 additional people each day qualified for the Medicaid program in Nebraska, a one-month record. In Rhode Island, a new analysis says nearly half of the state budget goes to safety-net programs, and Medicaid spending accounted for almost 90 percent of the increase in social service spending between 1992 and 2006. West Virginia’s budget director predicted that the department that oversees Medicaid will soon consume a fourth of the state budget, according to the Charleston Daily Mail, and the state’s Medicaid trust fund is expected to run dry by 2013.

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