Because of the way Medicaid is financed, a recession means double trouble. States have reduced revenue, and thus less money to spend on Medicaid, just as more people are losing their jobs and their health coverage, and need the program. States have little choice but to cut Medicaid spending. What happens to health coverage when workers lose their jobs and what is the impact on Medicaid? Can additional Medicaid funding be justified during a time of declining federal tax revenues and rapidly expanding deficits? What steps can the federal government and states take to provide assistance with health coverage to families hard hit by the recession?