Michigan Governor to Propose Cuts in Medicaid Budget, Other Services to Reduce State’s $1 Billion Shortfall
Michigan lawmakers and analysts from Gov. John Engler's (R) administration met on Oct. 23 to discuss the state's nearly $1 billion budget shortfall, which will likely necessitate across-the-board cuts. The Detroit Free Press reports that Engler next week will propose spending reductions to the House and Senate Appropriations Committees, and "[a]t least 5% will be cut from almost every department." Rep. Marc Shulman (R), chair of the House Appropriations Committee, said that lawmakers would try to avoid "deep cuts" in health and social services "if at all possible." Lawmakers are also discussing whether to delay a pending tax cut, or whether further reducing taxes is the best course for stimulating the state's economy. The $961 million shortfall covers fiscal 2002, which began Oct. 1, and the "previous budget year." It is considered the state's "worst fiscal crisis in 20 years" (Christoff, Detroit Free Press, 10/24).
Concerns for Medicaid
Responding to Engler's proposed cuts, Michigan Health and Hospital Association President Spencer Johnson said, "In light of recent events, the citizens of the state and nation want a strong and responsive health care system," adding, "Cutting Medicaid funding now would be the wrong action at the wrong time." According to the MHA, hospitals have experienced "significant increases in labor, blood, safety and drug costs since last fiscal year, but there "was no increase in Medicaid funding for this fiscal year over last." In addition, the MHA noted that the recent economic downturn has increased the number of uninsured; Medicaid enrollment during the last two economic downturns increased 10%. Encouraging Michigan lawmakers to look to the state "rainy day" fund or the redirection of tobacco dollars as alternatives to Medicaid cuts, Johnson said, "Medicaid cuts will only put additional stress on the financial stability of health care providers, weaken an already underfunded Medicaid program and reduce access to care for all state residents" (MHA release, 10/23). For further information on state health policy in Michigan, visit State Health Facts Online.
