State health programs face significant budget challenges

As states begin the new year, governors and legislatures are examining budget challenges.

Stateline: State Budget Outlook: The Worst Isn't Over
In the third quarter of 2010, overall state revenues were down 7 percent compared to two years earlier. That drop has come at a time when the slow economy is putting increasing demands on safety-net services that states administer, such as Medicaid. The state-run health program for people with low incomes has eclipsed K-12 education as the most expensive portion of overall state budgets (Goodman, 1/13).

Bloomberg: Gregoire Dismantles Washington She Built In Ascent To Governor From Clerk
Gregoire, a lifelong [Washington] state employee who was attorney general before becoming a two-term governor, says she now must slash health care, education and other programs to confront a projected $4.6 billion deficit. The shortfall represents about 14 percent of a $32.1 billion budget proposal for the 2011-2013 fiscal cycle, even after cuts. The Legislature convened Jan. 10 and will use her plan as a starting point for deliberations (Vekshin, 1/13).

The Arizona Republic: Arizona Health-Care Cuts Stir Warning
Jeopardizing federal health-care funding by cutting Medicaid eligibility without permission is "not a viable option," Arizona's Medicaid director told a legislative panel Wednesday. Tom Betlach, director of the Arizona Health Care Cost Containment System, said lawmakers will need to approve a waiver request and get it approved by federal health officials before AHCCCS can cut its rolls by about 300,000 people to help balance the coming year's budget (Reinhart, 1/13).

Star Tribune: Balancing The Cost Of Care 
Allegations of billing fraud in a 2008 legislative audit and a 164 percent increase in spending from 2002 to 2007 made [state-paid personal assistance, known as PCA] an easy target for officials trying to reduce state spending. But the strategy to control a runaway program also eliminated crucial services to hundreds and reduced services to thousands of Minnesotans with disabilities (Spencer, 1/13).

KQED: Brown's Budget: Good Start. How Will It Finish?
For starters, today's report [from the Legislature's non-partisan budget crunchers] points out that some of these same spending reduction proposals have been rejected by the Legislature before -- most notably, the governor's cuts in health care for the poor (Medi-Cal), a reduction being counted on for $1.7 billion in savings. (Medi-Cal cuts could also be subject to another round of legal challenges.) (Myers, 1/12).

Kansas Health Institute News: Brownback Pledges To Shrink State Government
Gov. Sam Brownback in his first State of the State address pledged that his administration will shrink state government and 'remake' the state's Medicaid program. Medicaid, the second biggest draw on the state treasury after education spending, accounts for about 18 percent of the state general fund. The program covers about one in 10 Kansans with most of the money spent on providing medical or nursing care for the frail elderly or disabled (Ranney and Shields, 1/12).

Connecticut Mirror: Medicaid Under Scrutiny In Tight Budget Year
Gov. Dannel P. Malloy said he's weighing all his options for dealing with an exploding Medicaid tab.In October, the Department of Social Services released a preliminary budget request that projected a nearly $1 billion increase in Medicaid costs starting this July. (The federal government provides a 50 percent reimbursement to Connecticut for its Medicaid expenses.) As for possible solutions, Malloy said, 'everything's on the table' (Shesgreen, 1/12).

Des Moines Register: 136 State Mental Health Employees May Lose Jobs
A new round of budget cuts might prompt the state to lay off 136 workers at mental health institutions and reduce the number of troubled children and adults it can care for. Iowa Department of Human Services Director Charlie Krogmeier said in an e-mail to staff Wednesday that one option is to eliminate 129 beds and lay off 136 staff members at three of the four state-run mental health facilities (Jacobs, 1/13).