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Recession Forcing Many States To Reduce Health Care Services

Ruzanna Harutyunyan's picture

Lawmakers and state officials have been "scrambling for months" to reduce state spending by cutting public assistance programs, including Medicaid and other health care services for low-income residents, the Los Angeles Times reports.

A recent study by the Center on Budget and Policy Priorities found that at least 44 states are projecting budget shortfalls totaling more than $350 billion over the next two years. According to the Times, the "unprecedented" cuts come as millions of U.S. residents lose their jobs and the accompanying health insurance.

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Some states are attempting to prevent cuts by delaying or lowering payments to physicians or other providers. According to the Times, the reduced payments have resulted in an increasing number of providers halting services to patients with state-funded insurance.

Federal lawmakers currently are working to develop a stimulus package that could include as much as $100 billion in funding to states to help with their Medicaid programs. However, some health officials warn that such a package "may not be enough to restore services being eliminated in the burgeoning crisis." According to the Times, the package is expected to include a requirement that states maintain medical services for which they are considering cuts, but the requirement would not apply to services that already have been cut.

The Times reports that an effort by congressional Democrats to reauthorize SCHIP and extend health insurance coverage to an additional four million children is likely to gain approval. In addition, federal lawmakers are developing proposals that would help residents keep their insurance coverage if they become unemployed (Levey, Los Angeles Times, 1/14).

Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at kaisernetwork.org/email . The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. © 2007 Advisory Board Company and Kaiser Family Foundation. All rights reserved.