Kaiser Daily Health Policy Report Highlights State Budget Developments In California, Utah, Virginia

Main Category: Health Insurance / Medical Insurance
Also Included In: Public Health
Article Date: 17 Dec 2007 - 12:00 PDT

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The California, Utah and Virginia officials recently discussed their budget plans for fiscal year 2008. Summaries of news about the state budgets appear below.

California
The California Department of Finance this week projected a state budget deficit of $14 billion over the next 18 months, higher than the $9.8 billion estimate by the state Legislative Analyst's Office in November, the Sacramento Bee reports (Yamamura/Rojas, Sacramento Bee, 12/14). The looming budget shortfall has split Democratic legislative leaders over the best course of action for negotiating a health care plan with Gov. Arnold Schwarzenegger (R), according to the San Jose Mercury News (Zapler, San Jose Mercury News, 12/14).

Schwarzenegger opposes raising taxes to reduce the budget shortfall, and instead plans to ask the Legislature for 10% across-the-board spending cuts, according to the Bee (Sacramento Bee, 12/14). Schwarzenegger maintains that adopting his health care reform plan would create new revenue and not depend on the general fund (Kurtzman/Davis, AP/Ventura County Star, 12/14). According to the Los Angeles Times, Schwarzenegger wants to finalize a deal on health care reform before shifting gears to the budget shortfall and outlining his spending proposal for the next fiscal year on Jan. 10 (Rau, Los Angeles Times, 12/14).

However, state Senate President Pro Tempore Don Perata (D) said state law bars funding cuts to education and some other services, which will force deeper cuts to health and human services programs (Los Angeles Times, 12/14). In addition, some health care analysts and Republican legislators contend that efforts to expand health care coverage would eventually run short of funding as medical inflation outpaces the growth of revenue for the program (AP/Ventura County Star, 12/14).

After meeting with Schwarzenegger and Assembly Speaker Fabian Núñez (D), Perata said, "It would be imprudent and impolitic to support an expansion of health care coverage without knowing how we're going to pay for vital health programs the state now provides for poor children, their families and the aged, blind and disabled" (Los Angeles Times, 12/14).

Meanwhile, Núñez has scheduled an Assembly session on Monday to vote on a health care compromise (AP/Ventura County Star, 12/14). Perata said that he would not ask Senate lawmakers to vote on an overhaul plan until Schwarzenegger outlines spending cuts for services such as Medi-Cal, the state's Medicaid program (San Jose Mercury News, 12/14).

Utah
Gov. Jon Huntsman (R) on Monday released a FY 2008 state budget that would increase eligibility for Medicaid and SCHIP, the Salt Lake Tribune reports (May, Salt Lake Tribune, 12/12). Huntsman said he is making health care his top priority, calling the current system "simply unsustainable."

The budget includes $30 million to fund efforts to develop a master plan for health system changes; $18 million to increase Medicaid provider rates; $1.1 million to improve health cost tracking and treatment outcomes, as well as to create a network to help physicians share patients' prescription histories; and $5 million to add 30 medical student slots at the University of Utah Medical School (Thalman, Salt Lake City Deseret Morning News, 12/11).

Huntsman also proposed increasing SCHIP income eligibility limits from 200% of the federal poverty level to 250% of the poverty level and increasing Medicaid eligibility from $27,464 to $41,300 for a family of four (Salt Lake Tribune, 12/12). Huntsman did not outline his personal recommendation for changing the state health care system but said he supports market-based initiatives (Salt Lake City Deseret Morning News, 12/11).

Virginia
Virginia Gov. Tim Kaine (D) on Wednesday announced a $25.4 million two-year plan that would expand subsidized health care for some uninsured women and small-business employees, the Washington Post reports. The plan is part of Kaine's FY 2008-10 budget proposal, which he will release on Monday.

The plan includes $50,000 for a not-for-profit organization that offers dental care at no or reduced cost and $5 million each for three community-based health clinics that serve the uninsured. The plan also would allocate $7.7 million to launch the VirginiaShare program. Under the program, the state, employers and employees would divide the cost of health coverage for workers with incomes less than 200% of the poverty level. In addition, Kaine's plan includes $7.4 million over the two years to offer prenatal care to 400 uninsured pregnant women and $300,000 to expand no-cost breast cancer screenings and cervical cancer tests for some uninsured women.

Because of a projected $600 million budget shortfall, Kaine was unable to implement his plan to provide coverage to Virginia's one million uninsured residents, or one-seventh of the state's population, without increasing taxes, which he has ruled out, according to the Post (Craig/Kumar, Washington Post, 12/13). Kaine said his health plan would be financed in part by savings in other parts of the budget, driven by the softening economy, according to the Richmond Times-Dispatch (Schapiro, Richmond Times-Dispatch, 12/13).

Several of the components included in Kaine's proposal come from recommendations from his Health Reform Commission and from this year's Joint Legislative Audit and Review Commission's report (McLaughlin, Washington Times, 12/13).

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