Kaiser Daily Health Policy Report Examines State Budget Developments

Main Category: Medicare / Medicaid / SCHIP
Also Included In: Health Insurance / Medical Insurance
Article Date: 23 Mar 2009 - 1:00 PST

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Summaries of developments related to state budget proposals in Georgia, Louisiana, New Jersey, North Carolina and Rhode Island appear below.

• Georgia: Gov. Sonny Perdue's (R) budget plan would eliminate by June 2010 all reserve funds for a health insurance plan that covers 690,000 teachers, state employees, dependents and retirees to address a $2 billion state budget shortfall and declining revenues, the Atlanta Journal-Constitution reports. The plan would cut by $113.7 million contributions that state agencies and boards of education pay for health benefits provided by the State Health Benefit Plan. The health plan's reserves as of last June totaled $154 million, or about 5.8% of total spending for the plan. The state Department of Community Health also said the budget proposal would cause state employees and teachers who stay in the plan to face a monthly premium increase of $16 to $25 for individual coverage and $50 to $74 for family coverage (Miller, Atlanta Journal-Constitution, 3/17).
  
  
• Louisiana: The $26.7 billion budget plan submitted by Gov. Bobby Jindal (R) to the Louisiana Legislature last week includes a 5% decrease in health care spending, or about $413 million, and an overall spending cut of 9.8% from the current year, the New Orleans Times-Picayune reports (Moller, New Orleans Times-Picayune, 3/14). The cuts will apply to hospitals, nursing homes, physicians and others that provide services to low-income, elderly and uninsured individuals. Total health care spending would drop from $8.17 billion to $7.76 billion, and Medicaid funding would be reduced from $6.5 billion in the current fiscal year to $6.18 billion. Louisiana Hospital Association President John Matessino said, "It's going to affect everyone," adding, "This can cause a lot of hurt" (Shuler, Baton Rouge Advocate, 3/14).
  
  
• New Jersey: Gov. Jon Corzine's (D) $29.8 billion budget plan, which he presented last week, seeks to save $3.3 million by ending Medicaid coverage of erectile dysfunction drugs, and $1.4 million from new copayments charged to 7,500 people with HIV/AIDS who receive their drugs through a state program, the Bergen Record reports (Reitmeyer, Bergen Record, 3/19). The state HIV/AIDS drug program is open to residents with incomes up to 500% of the federal poverty level. Under the proposed budget plan, people who fall below the poverty line would receive the drugs at no cost, while there would be a sliding scale for others who would pay $6, $15 or $30 per prescription depending on their income. In addition, the budget plan would impose a $2 per prescription copay for prescription drugs under Medicaid, capped at $10 per month. The proposed Medicaid and HIV/AIDS drug copays would save an estimated $6 million (Tamari, Philadelphia Inquirer, 3/13).
  
  
• North Carolina: Gov. Beverly Perdue (D) proposed a budget plan that would close 50 beds in state psychiatric hospitals to save more than $6 million annually, but that would add $12 million for the state to contract 111 additional local hospital beds for patients with mental illnesses, the Raleigh News & Observer reports. The plan also seeks to save $20.8 million on drugs for Medicaid beneficiaries by increasing use of generics and obtaining greater rebates from drug manufacturers. If those two measures fail to generate adequate savings, the state could impose a preferred drug list for Medicaid. The proposed budget also would increase CHIP enrollment by 8,000 children in each of the next two years (Bonner, Raleigh News & Observer, 3/19).
  
  
• Rhode Island: Gov. Don Carcieri's (R) $7.6 billion budget proposal would eliminate a state program intended to help seniors afford prescriptions once they reach the so-called "doughnut hole" coverage gap in the Medicare prescription drug benefit, the Providence Journal reports. The plan would eliminate assistance for 18,469 beneficiaries on Jan. 1, 2010. Completely abolishing the Rhode Island Pharmaceutical Assistance to the Elderly would save about $1.1 million, according to Carcieri's office. Last year, RIPAE received 134,000 claims from nearly 25,000 beneficiaries, and the average cost per claim was $14.11, according to the governor's budget office. The budget proposal also would raise taxes on cigarettes and health care providers to generate new revenue (Peoples, Providence Journal, 3/16).

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.

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