Medicaid Applicants Grow as Recession Widens

By  | 

WASHINGTON – That day in July was one that Tammy Morse won't soon forget. Five months earlier, her husband lost his job as a recruiter for the financial services industry. Once the family savings were gone, the mother of two from Stratford, Conn., saw no way to get health insurance coverage for her family other than to apply for Medicaid.

"It was humbling," she said of her visit to the state's Department of Social Services office. "For lack of a better way to put it, that was for other people. It wasn't for me."

Around the country, similar stories are playing out for thousands of families.

Since the recession began a year ago, many states have seen increases in the Medicaid rolls just as tax revenues are falling below projections. Governors have lobbied President-elect Barack Obama and Congress to help them weather the downturn by increasing the federal government's share of Medicaid spending for at least two years.

The governors said the extra $40 billion would ease the service cuts or tax increases that legislatures need to balance state budgets.

The unemployment rate has jumped from about 4.7 percent last December, when the recession began, to 6.7 percent today. Economists estimated in a Kaiser Family Foundation report that each 1 percent gain in the unemployment rate adds 1 million people to the Medicaid and State Children's Health Insurance Program.

In Connecticut, a state faring better than many, enrollment in the Medicaid program has climbed from about 312,000 last December to about 329,500 in November — a 6 percent increase. Many who lost their jobs were eligible to continue group health insurance. But that is not an option in most cases because they no longer have an employer picking up a large share of their premiums.

Medicaid insures nearly one in six low-income people in the U.S. The program typically covers the very poor and about half of enrollees are children. Spending came to $333 billion in the budget year ending Sept. 30, 2007. Washington picks up about 57 percent of that; the states cover the remainder.