State governments, caught in a fiscal bind, are looking to slash spending on medical support to the poor and elderly. Yet the program’s cost is set to metastasize under President Barack Obama’s coming healthcare overhaul.

More than half of the states are looking to slice Medicaid spending, a Johnson-era Great Society program that has grown to become 17 percent of hospital spending and cost $346 billion in 2009, the last year for which figures were available, according to a Wall Street Journal report.

Governors are worried that spending will only increase under the healthcare reform due to take effect in 2014, reports the daily. States now finance, on average, 43 percent of the cost, according to the WSJ.

President Barack Obama

Now, all 29 GOP governors are asking for waivers and some Democratic governors, too, reported the daily.

The new healthcare law nevertheless will require states to expand Medicaid coverage to a family of four making up to $30,000 a year, points out Grace-Marie Turner, president of the Galen Institute, in a blog post at Kaiser Health News.

That would add 20 million people to the system by 2019, costing $900 billion and growing the program to 84 million enrollees.

“Medicaid is arguably the worst healthcare program in the country,” Turner writes. “Recipients are promised a long list of benefits, but doctors who participate in the program are paid so little, and the paperwork is so onerous, that many can afford to see only a few Medicaid patients.”

Medicaid is an important “safety net” for the poor, but the financial pressures will cause it to fray, Turner says.

“Adding millions more recipients to the program without increasing the system's capacity will make it even more difficult for those currently on Medicaid to get the care they need,” Turner writes.