Wall Street Journal Examines Impact of State Budget Problems on Health Programs

The Wall Street Journal on Oct. 7 examines the increased number of states that have reduced health services and spent their shares of the national tobacco settlement to cover budget deficits. In the last fiscal year, which ended June 30 in most states, 46 states reported budget deficits of a combined $37 billion, the Journal reports. This fiscal year, states expect budget deficits to reach a combined $58 billion. Most states by law cannot have a budget deficit at the end of their fiscal years, which forces them to "slash spending, raise taxes or spend reserve funds." In addition, many states have reduced health services expenditures, reductions that analysts expect to have a larger impact on the public than in past economic recessions because state budgets "play a larger role in funding" the services (Gold/Gavin, Wall Street Journal, 10/7). Increased enrollment in state Medicaid programs has contributed in large part to budget deficits, the Newport News Daily Press reports. According to Sugit Canagaretna of the Southern Legislative Conference, "Increased caseloads have come with more layoffs, with people losing medical benefits." Although some states have moved to reduce Medicaid costs through prescription drug formularies and other programs, Canagaretna said that the programs do not "guarantee immunity from budget cuts," the Daily Press reports. In addition to health services reductions, some states have used their shares of the tobacco settlement to balance their budgets (Lessig, Newport News Daily Press, 10/6).

Reductions Outlined
Summaries of several health-related budget measures recently implemented or proposed by states appear below:

• Florida: State officials expect increased Medicaid enrollment to raise the state's Medicaid costs by an estimated $400 million this fiscal year (Kennedy, Fort Lauderdale Sun-Sentinel, 10/5).
  
• Idaho: State lawmakers voted to eliminate programs that provide dental services for low-income and disabled adults.
  
• Louisiana: The state plans to limit funds for hospitals that provide care to low-income adults.
  
• Massachusetts: The state has reduced by 50% the amount of flu vaccine available to groups that provide immunizations to seniors and the homeless at no cost.
  
• New Jersey: The state has reduced eligibility for public health care programs that target the "working poor."
  
• Wisconsin: The state sold bonds backed by $2.3 billion in tobacco settlement payments over the next 14 years for $1.4 billion (Wall Street Journal, 10/7).