Budget Deficits Compel States To Cut Medicaid, Other Health Programs

The economic downturn is leading many states to cut back on health coverage programs such as Medicaid, USA Today reports.

According to USA Today, Medicaid "is a target" for cuts because in most states it represents the second-largest portion of their budget. On average, Medicaid accounts for 17% of state budgets, USA Today reports.

Elizabeth McNichol of the Center on Budget and Policy Priorities said state budget deficits through the rest of the year and into fiscal year 2010 could reach $100 billion.

Some states already have cut health programs, including:

• Hawaii, which suspended its program to cover all uninsured children;
• California, which cut its Medicaid reimbursements to providers; and
• Massachusetts, which cut $293 million from its Medicaid budget.

In addition, South Carolina Gov. Mark Sanford (R) has until Thursday to decide whether to sign a state budget that would reduce health care spending by $160 million, including an 8.1% cut to Medicaid.

McNichol said, "Health care gets hit hard when states have to cut back."

Diane Rowland, executive vice president of the Kaiser Family Foundation and executive director of the Foundation's Commission on Medicaid and the Uninsured, said, "When the economy goes down, states have increased pressure (from more uninsured), yet have to curtail plans to broaden coverage" (Appleby, USA Today, 10/29).