N.J., Tenn. And Florida Battling Growing Medicaid Costs; Need For Health Care For Parolees In Calif.

Medicaid costs in many states are expanding deficits while lawmakers and the public struggle to keep up with the growth in health costs.

NJBIZ reports, New Jersey's budget deficit has grown $170 million to $180 million because of Medicaid costs, according to a legislative budget officer. "Savings in the Medicaid program that were projected for this year have not materialized, according to David J. Rosen, budget and finance officer for the nonpartisan Office of Legislative Services. … Rosen said the amount of sales tax revenue collected in December will likely grow, which would be the first month of year-over-year growth this year" (Kitchenman, 2/4).

In Tennessee, some hospitals could face closure because of the fiscal struggles of TennCare, that state's Medicaid program, the Nashville Business Journal reports. The program has been targeted for $201 million in cuts. "With the budget on the table, Middle Tennessee hospitals are crunching numbers to determine what impact the proposed TennCare cuts — the largest in the program's 16-year-history — will have on their bottom lines. They don't have to get very deep into their calculations to know it's the hospitals that will feel the crunch most severely, and some may not survive. … The association estimates the proposed cuts would translate to $526 million in lost state and federal funding to its statewide membership of hospitals, health systems and other health care organizations" (Wortham, 2/5).

The New York Times reports that  California is preparing to reduce its prison population by 40,000 after a federal court ruled that among a variety of problems, the prisoners were not getting adequate medical care. But questions remain about whether they can get that care outside the prison system. "Current public health care systems are not designed to accommodate the varied logistical and cultural needs of men and women who have been incarcerated. As a result, many former inmates simply do not seek care at all, said several doctors who work with former prisoners." Some, however, are taking steps to ensure released prisoners have care. "Some counties are looking to the Transitions Clinic in San Francisco as a possible model for ensuring that this group gets health care. The clinic is the first in the country specifically for parolees, combining aggressive outreach — like recruiting prisoners before their release — with a nonjudgmental approach" (Dembosky, 2/4).

Health News Florida reports, Florida HMOs are saying lawmakers should reduce doctors' Medicaid reimbursement by 10 percent if they refuse to sign managed-care contracts. "The Florida Association of Health Plans has a two-year plan to expand the number of Medicaid patients enrolled in managed care, but says it needs help in getting hospitals and physician groups to participate. The push comes as the Legislature seeks ways to trim Medicaid spending, which now accounts for 26 percent of the state budget and is forecast to rise to 31 percent in four years. Because the state pays Medicaid HMOs on average 92 percent as much as a traditional Medicaid provider, the impasse hurts taxpayers, said William McHugh, chairman of the health plan group. The health-plan group estimates that the state saves $22 million for every 100,000 recipients moved into HMOs" (Jordan Sexton, 2/4).

The Boston Globe reports on the higher rates that small business owners pay to offer health coverage to their employees in Massachusetts. "Although overall health plan costs have increased by 7.5 percent annually since 2006, members of the Retailers Association of Massachusetts have seen average yearly increases of 15 percent, according to association president Jon Hurst. That's a real problem for Massachusetts. Small companies can be big job generators — and this is a state hurting for jobs" (Lehigh, 2/5).

This is part of Kaiser Health News' Daily Report - a summary of health policy coverage from major news organizations. The full summary of the day's news can be found here and you can sign up for e-mail subscriptions to the Daily Report here. In addition, our staff of reporters and correspondents file original stories each day, which you can find on our home page.