New York Times Examines States’ ‘Overspending,’ Highlights Health Care Programs

Facing a slowing economy, several states are struggling to meet financial commitments for programs -- including several health initiatives -- that were expanded or implemented during the height of the economic boom, the New York Times reports on March 8 in a front-page story. As of last month, 31 states "reported spending more [overall] than they budgeted," with Medicaid programs in 23 states over budget. Among the new programs highlighted in the Times is one in Missouri, where the state Legislature approved a tax credit to assist seniors in purchasing prescription drugs. Projected to cost $20 million per year, the program's actual cost is now $89 million. In Indiana, a 1998 enrollment campaign for the state's CHIP program led to a 150,000 increase in the number of children enrolled in the program (to 350,000) and also created an increase in Medicaid beneficiaries. The state's Medicaid program now requires a 9.2% budget increase in the next fiscal year, but the Indiana House has proposed only a "scarc[e]" increase. Kathy Gifford, the state's Medicaid director, said, "I don't have a way that I ... can get to a zero percent growth rate [in Medicaid spending] by July. I don't know what we would do if that budget actually passes." Indiana, like many states, does not have the option of running a deficit, and Gifford's problem is emblematic of the reality of "shrinking tax revenues ... colliding with" increasing program costs, that many states are facing (Belluck, New York Times, 3/9).