Kaisernetwork.org – Dec. 19, 2008.

Summaries about recent news involving health care in the state budgets of California, Iowa, Kentucky, Louisiana, New York, South Carolina, Virginia and Washington state appear in this article.  Click title to read more…

• California: Gov. Arnold Schwarzenegger (R) on Thursday said he would veto an $18 billion plan by state Democrats that aims to address the state budget deficit by cutting $7.3 billion from health care, school and other programs, the Los Angeles Times reports. California’s deficit is projected to reach $41.8 billion by 2010. The state Legislature approved the package of bills on Thursday. The plan also would increase revenue by an estimated $9.3 billion through a series of increases to some taxes and fees. The plan centers on a legal distinction between taxes — which require two-thirds legislative approval — and fees — which require a simple majority approval. According to the Times, the legislation had not been sent to the governor late Thursday, and legislative staff said that lawmakers would resume discussions with the governor’s office (Rau/McGreevy, Los Angeles Times, 12/19).
• Iowa: Iowa State Auditor David Vaudt on Tuesday said closing the state’s $616.4 million budget shortfall next year will require Medicaid spending cuts, the Des Moines Register reports. Vaudt in a meeting with Register editors and reporters said, “You can’t take education and Medicaid — which are probably 75% of the budget — and say, ‘I’m not going to touch those,’ because if you only have 25% left, you’re going to have to essentially wipe out a lot of other things.” He added, “It’s just not going to work.” State Senate Majority Leader Michael Gronstal (D) said that he is confident that Medicaid will not be subject to budget cuts but added that everything in the budget is under consideration for cuts (Clayworth, Des Moines Register, 12/17).
• Kentucky: Kentucky Gov. Steve Beshear (D) last week proposed a budget plan that includes 4% spending cuts for public health agencies but that would avoid cutting Medicaid funding as long as a 70-cent-per-pack cigarette tax increase is approved, the Louisville Courier-Journal reports. The cuts would affect agencies that provide prenatal care, childhood immunizations, health education and smoking-cessation programs. Beshear said the Medicaid program must be protected from cuts because enrollment is increasing at a rate of 3,000 beneficiaries per month and the program already faces an estimated budget shortfall of $183 million in the current fiscal year. Beshear added that he hopes the federal government will approve a temporary increase in funding for state Medicaid programs (Yetter, Louisville Courier-Journal, 12/12).
• Louisiana: Louisiana Department of Health and Hospitals Secretary Alan Levine on Monday said the agency is preparing for funding cuts of between $125 million and $178 million as the state seeks to fill a $341 million budget shortfall for FY 2009, the Baton Rouge Advocate reports. He said, “The lion’s share of (the cuts) is going to come out of the state’s $7 billion-plus Medicaid program.” The funding cuts could result in Medicaid losing more than $500 million when federal matching funds are counted. Levine said he will try to minimize reimbursement cuts to health care providers, although some payment cuts will be unavoidable. In addition, Levine hopes to keep the cuts from affecting pediatricians and family physicians as a way to prevent the state from losing more Medicaid providers (Shuler, Baton Rouge Advocate, 12/16).
• New York: Gov. David Paterson (D) this week proposed a plan to close the state’s $15 billion budget shortfall for the current and following fiscal year through $4 billion in taxes and fees and $9 billion in cuts, mostly aimed at education and Medicaid, the New York Times reports. Under the plan, higher taxes will be imposed on health insurers (Hakim/Peters, New York Times, 12/15). Medicaid payments will be delayed as part of a plan to generate $1.1 billion in one-time revenue (Quint, Bloomberg, 12/16). Health care officials said the cuts to public health programs will impose restrictions on health care services for low-income state residents. The plan also calls for reducing inpatient detoxification payments by $96.9 million statewide; increasing an annual fee on tobacco retailers that would generate $18.5 million; shifting reimbursements from acute care to primary care or preventive care; and phasing out 6,000 nursing home beds and replacing them with “community alternatives” over five years to save $8.7 million (Ochs, Long Island Newsday, 12/17). Paterson also has proposed expanding the state-sponsored Family Health Plus insurance program to more state residents and eliminating certain eligibility requirements for Medicaid, such as fingerprinting and in-person interviews. Paterson is relying on federal funding to help expand the program. He also proposed diverting $282 million from graduate medical education programs to fund care of the uninsured at teaching hospitals, and increasing funding for veterans’ programs, no-cost cancer screenings and obesity prevention (Madore/Amon, Long Island Newsday, 12/15).
• South Carolina: A South Carolina oversight panel last week cut $383 million from agency budgets, which is expected to reduce access to care for Medicaid beneficiaries, the Columbia State reports. The panel has cut agency budgets by more than $1 billion since July. In the latest round of cuts, the state Department of Health and Human Services will lose $61 million, as well as $398 million in additional federal matching funds. State HHS spokesperson Jeff Stensland said, “There will be reductions in services and the number of people receiving Medicaid,” adding, “There will be significant program changes.” He said the agency has few options because the state Legislature in October mandated that the agency could not reduce payments to health care providers (O’Connor, Columbia State, 12/12).
• Virginia: Virginia Gov. Tim Kaine (D) this week unveiled a revised plan to address a projected $2.9 billion shortfall in the state’s two-year budget that includes doubling the state’s 30-cent-per-pack cigarette tax and freezing Medicaid enrollment, the Virginian-Pilot reports. The current budget period ends July 2010 (Fiske/Walker, Virginian-Pilot, 12/17). Under Kaine’s plan, about $418 million would be saved by freezing Medicaid enrollment, limiting qualifications for certain services under Medicaid or reducing the program’s reimbursement payments to providers (Nolan/Whitley, Richmond Times-Dispatch, 12/18). It also would close the last state-operated mental health hospital for children in Virginia, as well as a facility for adults, thereby reducing the number of institutionalized state residents by a third. In addition, Kaine proposed that more resources be diverted to community-based mental health programs (Craig/Kumer, Washington Post, 12/17). Kaine said the cigarette tax increase could generate an additional $148 million for the state Medicaid program, but Republican lawmakers oppose the tax hike, saying it could hurt employment in the state (Emerling, Washington Times, 12/18).
• Washington state: Gov. Chris Gregoire (D) on Thursday released a budget proposal that would suspend plans approved in 2007 to expand SCHIP to cover children in families with incomes up to 300% of the federal poverty level by 2010, the AP/Seattle Post-Intelligencer reports. The expansion was passed by the Legislature on the condition that funding would be available upon implementation (Woodward, AP/Seattle Post-Intelligencer, 12/17).