POSTED: 1:30 a.m. HST, Oct 1, 2010
Some 23,000 Hawaii residents signed up for Medicaid last year, boosting the state's rolls by 11 percent, as the recession continued to wipe out jobs and workplace health coverage.
The growth means about 1 in 5 people in the islands are now on the safety-net medical insurance program.
"This has been a painful and prolonged recession," said Barbara Kim Stanton, AARP-Hawaii state director. "Those who had meager savings or funds to begin with are really sinking low below the poverty line."
The Medicaid numbers are the latest piece to emerge in a grim statistical picture of the recession's toll on Hawaii's low-income households.
New Census numbers show 12.5 percent of Hawaii residents were below the poverty line last year, the highest percentage since 1997. And food stamp usage continues to grow -- with some 145,000 people statewide now getting the benefit.
Hawaii's Medicaid enrollment increase was the 15th highest in the nation last year.
Nationally, Medicaid enrollment grew 8.2 percent last year, according to a report released yesterday by the nonprofit Kaiser Family Foundation.
Participation in Medicaid last year jumped to more than 48 million -- a record 15.7 percent of the U.S. population, the Associated Press reported. With the economy barely improving, states are forecasting an additional 6 percent increase in the rolls next year, further straining their cash-depleted budgets.
In Hawaii nearly 226,000 residents were on Medicaid in 2009, up from 203,000 the year before and 158,000 in 2000.
"With the economic downturn, we have seen that 11 percent increase ... (of) people in Hawaii needing assistance with their health coverage," said state Sen. Suzanne Chun-Oakland, chairwoman of the Human Services Committee. "That's what government is here for. It's a safety net."
Hawaii is facing a considerable funding shortfall for Quest -- the state's version of Medicaid. The federal government covers about two-thirds of the cost of the program, and the state pays for the rest.
Since the start of the recession in December 2007, nearly 6 million people nationwide have signed up for Medicaid, according to Kaiser. That period includes the biggest 12-month increase since the program's early days: 3.7 million new enrollees from December 2008 to December 2009.
"There seems to be no end in sight to the fiscal pressure on the Medicaid program," said Vernon Smith, who co-authored the Kaiser report.
Starting in the fall of 2008, the federal government provided more than $100 billion in additional Medicaid funding to help states cover growing numbers of people in need.
The last of that money will run out in June, and states will face a jump of 25 percent or more in their share of costs, although they are still likely to be financially strapped.
Rising Medicaid enrollment underscores the growing role of the government in health care, a polarizing issue in this year's midterm congressional elections after President Barack Obama and Democrats pushed through a massive overhaul of the nation's health care system.
With or without Obama's overhaul, government is becoming the dominant player in health care. Federal, state and local government spending will overtake private sources in 2011, three years before the new law's major coverage expansion, Medicare economists said in a recent report.
Medicaid is a federal-state partnership created with Medicare in 1965 under President Lyndon B. Johnson. It covers low-income families and many seniors in nursing homes, with Washington paying about 60 percent of the cost on average. Medicaid has also been assigned a major role under the new health care law, which expands the program to cover an estimated 18 million additional low-income adults starting in 2014.
For now, states are cutting Medicaid to try to curb costs.
Forty-eight states took some action to limit Medicaid spending this year, and most plan more cuts next year. Although they did not reduce eligibility, Kaiser found that states took steps to restrict the scope of coverage:
» A record 20 states placed restrictions on benefits, and 14 plan new restrictions next year. Arizona, California, Hawaii and Massachusetts eliminated some or all dental coverage. Other states limited medical imaging, therapies, supplies and personal care.
» Thirty-nine states cut or froze payments to hospitals, doctors and other service providers, and most plan another round next year. Medicaid payment rates are already so low that in many states it is hard to find doctors who will accept the coverage. Yet 20 states lowered payments to doctors this year, and 12 plan to do so next year.
» Eighteen states placed limits on long-term care services, and 10 plan additional limits next year.
The recession officially ended in mid-2009, but the Kaiser study indicates its ill effects will take a while longer to wear off. Meanwhile, states will have to gear up for the major Medicaid expansion under the health care law.
"We're on a teeterboard," said Carol Steckel, president of the National Association of Medicaid Directors and head of Alabama's program. "Every now and then that teeterboard balances, but it's going to be rare. There's always something else."
Star-Advertiser reporter Mary Vorsino contributed to this story.