States' pockets empty as Medicaid stimulus winds down

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The 2009 stimulus package provided an additional $100 billion in Medicaid payments over the past three years, but those payments ended on July 1, and some states were hit far harder than others, reports Stateline. Hospitals, which receive a large proportion of Medicaid funding, will be among the hardest hit of healthcare providers.

Hawaii was hit the hardest, losing 16 percent of its Medicaid funding, followed by Louisiana and Washington State, both with 13 percent cuts, according to the Federal Funds Information for States data. Most of the remaining states saw cuts in the 10 percent to 11 percent range.

Given that the unemployment rate has barely budged downward since 2009, states still have larger than normal Medicaid rolls. The matching funds formula, based on state per capita income, was also abandoned during the stimulus period. That equation has now kicked back in. Hawaii, North and South Dakota, and Nebraska will be hit particularly hard due to their growth in per capita income over the past several years.

The federal government will publish new payment rates for 2013 later this year, and they are expected to change significantly because they will be based on 2010 Census data.

For more:
- read the Stateline article
- read the Federal Funds Information for States data

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