Rising State Revenues Might Allow More Health Program Spending
State revenues "improved notably" in fiscal year 2005, which will allow "many states to begin restoring funding to programs cut during the previous economic downturn," according to the Fiscal Survey of the States issued Tuesday by the National Governors Association and the National Association of State Budget Officers, the Washington Post reports. Health care is considered a "major" area of increased spending, with several states trying to boost programs to reduce the number of uninsured people, according to the Post.
Illinois' new All Kids program, for example, will provide low-cost health insurance to children in families with incomes too high to qualify for Medicaid but too low to afford health coverage. The fiscal survey reported that Medicaid costs rose 7.5% in FY 2005, with additional increases "certain" for next year. While state governments pay about half the cost of Medicaid, the added "burden is expected to dampen somewhat legislators' enthusiasm for new spending in the coming fiscal year," the Post reports.
NASB Executive Director Scott Pattison said, "The memory of the really bad downturn we had from 2002 to 2004 is strong. And there's always Medicaid. And a lot of states want to build up their rainy-day funds in case the economy goes soft again. So all of that is going to limit somewhat the momentum for new programs" (Reid, Washington Post, 12/21). The report is available online. Note: You must have Abode Acrobat to access the report.
In related news, the AP/Arkansas Democrat-Gazette on Wednesday looked at how the upswing in the nation's economy could create funding gaps for state Medicaid programs totaling up to $849 million over the next two years. As state income levels rise, the federal government reduces its share of funding.
Twenty-nine states will receive an estimated $579.7 million less for Medicaid during the federal budget year starting Oct. 1, 2006, the largest number of states to receive less federal funds in at least five years. In addition, nine states will receive more federal funds, the lowest number since 2000 (Messina, AP/Arkansas Democrat-Gazette, 12/21).
NPR's "Talk of the Nation" on Tuesday included a discussion of states' strategies for managing increased health care costs. Guests on the program included Illinois Gov. Rod Blagojevich (D); Alan Levine, secretary of the Florida Agency for Health Care Administration; Timothy Murphy, secretary of Health and Human Services for Massachusetts; and Julie Rovner, health policy correspondent for NPR (Conan, "Talk of the Nation," NPR, 12/20). The complete segment is available online in RealPlayer.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.