States Struggle To Balance Budgets, Health Programs Face Cuts

National Journal: States are aware of the "lingering effects of recessions" on the enrollment in their Medicaid programs. "Because it takes time for people to re-enter the workforce and get insurance, it can take years for Medicaid rolls to shrink to prerecession levels and for states to restore program and funding cuts." According to a February report by the National Governors Association, states are "facing budget gaps totaling $136 billion for fiscal 2010 through 2012 and that Medicaid enrollment would grow 6.6 percent in fiscal 2010" (Werber Serafini, 3/13).

The (Jacksonville) Florida Times-Union: As Georgia's governor and legislature battle over budget cuts, payments to hospitals are on the line. Gov. Sonny Perdue said last week that since hospitals and some lawmakers are fighting his plan to tax hospitals, he may have to cut Medicaid reimbursements more deeply than anticipated. Perdue's plan "required the hospitals to pay a 1.6 percent tax on their revenues, money many of them would recover by upping their costs, which the federal share of Medicaid was to pay. While some large hospitals that treat loads of Medicaid patients would have come out ahead, many private hospitals would have been the losers. The hospital lobby refused to buy in. It argued instead for a higher tax on cigarettes. ... Perdue said if they didn't want to pay a 1.6 percent tax, maybe they'd rather have a 10.25 percent cut in what they're paid by Medicaid. On top of that, he wants to take away nonprofit hospital's exemption from sales tax on the supplies they buy" (Jones, 3/15).

The Washington Post: "The Virginia General Assembly adjourned its annual legislative session Sunday evening after adopting a two-year, $82 billion budget that cuts millions from education, health care and public safety -- curtailing state spending more aggressively than any in generations while fulfilling the new Republican governor's promise not to raise taxes. The trade-off for holding firm against a tax increase to plug a $4 billion hole was a spending plan that cuts deeply into virtually every area of state responsibility." Some health cuts include: "Only 250 more mentally disabled adults will receive money to get community-based services, in a state where the waiting list for such services numbers 6,000 and is growing. ... Medical care providers will see Medicaid payments from the state trimmed, and fewer poor children will be enrolled in state health care, although those health cuts could be tempered by anticipated federal funds" (Helderman, 3/15).

The Palm Beach Post: "Almost two years after lawmakers created it, a program to provide affordable health insurance to small businesses has yet to enroll its first client. The goal of the initiative, Florida Health Choices, signed by Gov. Charlie Crist in May 2008, was to provide employees a marketplace of offerings in what's known as an insurance exchange. ... But it's unlikely that will happen until late in the year. Business owners are frustrated. ... The $1.5 million in funding has to last until the program starts. So far, $112,826 has been spent, with the biggest amount — $90,653 — for consultants and expenses ... Initially, about 20,000 people are expected to participate with the potential for 3.7 million subscribers" (Salisbury, 3/14).

St. Louis Post-Dispatch: Missouri Gov. Jay Nixon, "the Democrat who promised to expand Medicaid, is seeking $120 million in health care cuts to buoy the sagging state budget. And in a role reversal that illustrates the political quagmire that Medicaid poses for Nixon, it's the Republican Legislature that is balking. Nixon, facing declines in revenue for two straight years, says he has to squeeze savings from all programs, including Medicaid. He can't reduce eligibility because of temporary restrictions set by the federal government under the Stimulus Act. But he wants to rein in spending on home care and anti-psychotic drugs, shift some costs to hospitals and the federal Medicare program, and lower rates the state pays for items such as lab work and X-rays, among other things" (Young, 3/15).

The Myrtle Beach Sun News: The South Carolina "House begins debate today on a budget proposal for the state, to take effect July 1. How the state will pay for health care services in the future is expected to be a heated issue. ... Almost 17,000 South Carolinians could find themselves choosing between the prescriptions they now get from the state. Some of the 20,000 South Carolinians who get free prescriptions from drug companies and others could find there is no one to help them get those drugs. Federal stimulus aid could stave off cuts this year. But next year that aid will be gone, setting the stage for a health care reckoning" (O'Connor, 3/15).

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.