Kaiser Daily Health Policy Report Highlights Recent News About State Budgets, Medicaid In New York, Virginia

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New York
Applications for New York state's Medicaid program increased by 30% between December 2007 and April, according to the New York State Department of Health, "leading worried hospital officials to see the potential for a spike in those seeking care even while aid from the state is likely to shrink," the Rochester Democrat and Chronicle reports. Agency spokesperson Claudia Hutton said about 39,000 people applied for the program in April, the latest month for which data are available, and the state has run out of applications.

Enrollment in the program, excluding the state's Family Health Plus and Child Health Plus programs, since the end of 2007 has increased by 14%, the Democrat and Chronicle reports. According to the Democrat and Chronicle, applications for Medicaid coverage "usually increases as the economy slumps and people lose their jobs," but "the problem is worse in this downturn because health care providers could get less money from the state as officials try to close multibillion-dollar budget gaps."

William Van Slyke, a spokesperson for the Healthcare Association of New York State, said, "This is a time when the Medicaid safety net is more important than ever." He said that state lawmakers in August reduced health care spending by $400 million in an effort to close a widening budget deficit. "It's going to be an impossible task to keep up with that growth in demand while at the same time doing draconian cuts in Medicaid," he said (Gallagher, Rochester Democrat and Chronicle, 10/26).

Virginia
Virginia's expected $2.5 billion shortfall for next fiscal year could mean deeper cuts to public programs that provide health care and mental health services to low-income, disabled or elderly state residents, the Washington Post reports. For the current fiscal year, Gov. Timothy Kaine (D) was able to limit spending cuts to administrative jobs and functions related to public health care and mental health programs. However, further cuts needed to meet new budget constraints are expected to target health services more directly.

The Virginia Department of Social Services, which includes public health care, mental health and other programs, comprises about one-fourth of the state's planned $4.7 billion budget for FY 2010 and "will probably bear the brunt of the cuts" needed to address the increasing deficit, the Post reports. Kaine spokesperson Gordon Hickey said, "The governor has said that everything is on the table, and that does mean everything," adding, "It's not going to be pretty." Christopher Bailey, senior vice president at the Virginia Hospital and Healthcare Association, said, "It's as ugly a budget climate as I've seen in 15 years," and it is "hard to see how this is not going to impact real people."

Advocates and analysts have raised concerns that Medicaid services will be targeted. The state program is expected to cost $3.1 billion in FY 2010. The state ranks 48th in the country in Medicaid spending per capita and has some of the strictest eligibility requirements. Jill Hanken, a staff attorney at the Virginia Poverty Law Center, said, "I'm not sure what else they can cut out of Medicaid," noting that the state's "eligibility rates are low" and most of the "services provided are mandatory, so there aren't too many places we can turn for savings" (Jenkins, Washington Post, 10/26).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation.

© 2008 Advisory Board Company and Kaiser Family Foundation.  All rights reserved.