Kaiser Daily Health Policy Report Examines How State Budget Proposals Impact Health Services

A number of governors recently released or amended budget plans. The following summarizes how the proposals impact health care services.

• Florida: Gov. Jeb Bush (R) on Feb. 6 unveiled a $437 million supplemental budget request for fiscal year 2003 that includes provisions for a variety of health care-related programs. The supplemental plan comes after the Legislature in January made $1.3 billion in cuts to current state spending. Several of Bush's supplemental requests restore funding to programs that were "targeted" for cuts. Aides said the supplemental plan would appropriate funding that was available last month but had not been "earmarked for specific programs" because of time constraints (Kleindienst, South Florida Sun-Sentinel, 2/7). Under the supplemental plan, the state Department of Health would receive $200 million beyond what Bush had originally requested. The plan would allocate $162.6 million to reduce the waiting list for respite services and $32 million to expand a prescription drug discount program to more Medicare beneficiaries (Skidmore, Florida Times-Union, 2/7). The supplemental request plan also calls for a $13.8 million increase in substance-abuse treatment programs, which would cut the waiting list for a pilot drug court program (South Florida Sun-Sentinel, 2/7).
• Massachusetts: To cover a "worsening budget gap," acting Gov. Jane Swift (R) on Feb. 4 announced $218 million in cuts, some of which will impact health care services in the current fiscal year budget ( Nashua Telegraph, 2/5). The proposed reductions include a $50 million cut at the state Department of Health -- on top of a $35 million cut already included in the 2002 budget -- that would reduce funding for a variety of disease-prevention programs, including funds for hepatitis C, breast cancer and multiple sclerosis (Nangle, Worcester Telegram & Gazette, 2/1). The cuts also include $15 million from smoking-prevention programs; $2.8 million from cervical and breast cancer prevention and $4 million from HIV/AIDS programs. Swift said that if the economy improves, some of the funding could be reinstated (Nashua Telegraph, 2/5).
• North Carolina: In response to a projected $900 million budget shortfall this year, Gov. Mike Easley (D) on Feb. 5 declared a "budget emergency" and ordered most state departments to "curtail spending" by 3%. Cutting the state Department of Health and Human Services' budget without impacting services will be "virtually impossible," Carmen Hooker Odom, the department's secretary, said. The department faces an "added burden," as enrollment in programs such as Medicaid is increasing. Easley's plan also would use money from the state's reserve and the Mental Health Trust Fund to cover the budget gap (Gardner/Christensen, Raleigh News & Observer, 2/6).
• Tennessee: Gov. Don Sundquist's (R) proposed fiscal year 2003 budget would increase state spending on TennCare, the state's Medicaid managed care program, by 3.8% -- about $70 million -- over current funding levels. The budget includes about $115 million for TennCare improvements; most of that funding would cover higher prescription drugs costs and payments to managed care companies. The budget plan assumes that Sundquist's proposal to overhaul TennCare will be approved by the state comptroller's office and the federal government (Snyder, Nashville Tennessean, 2/7). Sundquist's proposal would scale back TennCare to a managed care plan -- called TennCare Medicaid -- for Medicaid-eligible residents. Sundquist's plan also calls for the creation of TennCare Standard, which would offer benefits similar to those under a commercial managed care plan to the following groups: adults with no access to group insurance and with incomes below the poverty level; children in families with incomes below 200% of the poverty level and no access to group insurance; and medically eligible people with illnesses that make them uninsurable. The proposal also would create TennCare Assist, which would offer premium assistance to low-income workers to purchase private health insurance (Kaiser Daily Health Policy Report, 12/14/01).