Wall Street Journal Looks at How State Budget Deficits Could Affect Health Programs

The Wall Street Journal Nov. 1 examines the pressures, including rising Medicaid costs, that some governors will face in balancing their state budgets. The combination of "anemic" growth in tax receipts with rising costs for "big-ticket services," including Medicaid, means that governors elected this year will have to "come up with specific remedies for yawning budget deficits," the Journal reports, and some of those solutions could include cuts to health-related services and programs. In Ohio, where former Cuyahoga County Commissioner Tim Hagan (D) is challenging Gov. Bob Taft (R), two special legislative commissions are examining proposals to reduce state Medicaid costs, which are expected to increase from $8 billion to $9 billion next year. As part of the reductions, Taft has said he supports reducing Medicaid reimbursements to nursing homes. In Massachusetts, Democratic gubernatorial candidate state Treasurer Shannon O'Brien and Republican candidate Mitt Romney both support reducing Medicaid spending on prescription drugs. In Arizona, state Attorney General Janet Napolitano (D) and former Rep. Matt Salmon (R-Ariz.) have both said the state should reduce most agency budgets, including Medicaid and other health services, by 10% (Caffrey/Gold, Wall Street Journal, 11/1).

Virginia Reductions
In other state budget news, Virginia Secretary of Health and Human Resources Jane Woods on Oct. 31 said state health agencies should begin to "prioritize programs and services" in preparation for a round of budget cuts to be announced in late December, the Richmond Times-Dispatch reports. Gov. Mark Warner (D) in November announced a round of cuts that "spared" some agencies and services, including "direct health care services" provided by Medicaid, but the Times-Dispatch reports that every state program is under consideration for the second round of cuts. Speaking at a meeting organized by the Virginia Quality Healthcare Network, a coalition of health care advocacy groups, Woods said the state may reduce spending on Medicaid prescription drugs, nursing home services for low-income seniors and children's health care. Cindi Jones, chief deputy director for the state Medicaid program, said reimbursements to hospitals, pharmacies, nursing homes and managed care organizations have already been reduced this year. Patti Stevens of the Fairfax County Human Services Department of Systems Management warned that further reductions in provider payments or cuts to programs providers "feel essential" could "erode provider participation" in Medicaid (Smith, Richmond Times-Dispatch, 11/1).