Recession-Battered States Cut Funding For Health Services

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Under economic pressure, states are slashing funding for health services from Connecticut to California. The cuts frustrate providers and lawmakers are looking for ways to limit harm.

The Associated Press reports: "Washington is pouring $87 billion in federal stimulus money into the states to help maintain state-run Medicaid health care for the needy - and to handle the expected surge in enrollment. But Connecticut and other cash-strapped states say they still must slash spending on health care to cover massive budget deficits. At least 21 states have already restricted low-income children's and families' eligibility for health insurance or their access to services; at least 22 states and the District of Columbia are cutting services for low-income elderly or disabled patients."

AP also reports: "The programs that do face cuts are diverse. And the reductions come at a time when the demand for government health care is expected to rise as the unemployment rate climbs and people lose their private health coverage. ... Many of the programs facing cutbacks or elimination were hard-won by advocates over the years." The story highlights approaches to cuts in Louisiana, Illinois, Ohio, Maryland and Washington state (Haigh, 7/29).

San Diego Union Tribune: "San Diego County health care providers say they are outraged and devastated by Gov. Arnold Schwarzenegger's line-item veto of $394 million in state spending for health and welfare programs. The cuts will affect programs including those for child abuse and neglect, AIDS prevention and treatment, and health insurance for poor children. ... The move is ill-timed, clinic officials say, because layoffs stemming from the recession have boosted the number of needy patients." Some of the budgets cuts cited include $61 million from County funding to administer Medi-Cal; $52 million from AIDS prevention and treatment and $50 million from Healthy Families, California's health insurance program for poor children (Su, 7/30).

The New York Times: "Massachusetts trimmed its ambitious plan to provide health care for virtually all its residents on Wednesday when the legislature failed to restore enough money to the budget to provide full benefits for 30,000 legal immigrants. It did, however, provide for partial coverage, relieving some supporters of the program, who had feared that the cuts would be deeper. Last month, to help close a gaping deficit, the legislature eliminated health insurance for the immigrants, which cost about $130 million a year. Wednesday's vote restored $40 million - about 30 percent - leaving unclear just how much care the affected immigrants would qualify for. Those affected are permanent residents who have had green cards for less than five years. It was the first retreat for the health care experiment just as Congress looked to the state as a model" (Goodnough, 7/29).

The Eagle Tribune: "Small businesses in New Hampshire are struggling to provide affordable health care for their employees - and the state is doing something about it. As of Oct. 1, small-business owners could save up to 20 percent on health care costs, thanks to a new health care reform plan enacted by Gov. John Lynch. ... The new program, New Hampshire Healthcare First, was first introduced during the 2008 legislative session. It will give businesses with fewer than 50 employees additional health care incentives - health questionnaires, disease management programs and wellness incentives - to keep workers healthy and insurance costs low" (LaFay, 7/30).

This information was reprinted from kaiserhealthnews.org with kind permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery at kaiserhealthnews.org.

© Henry J. Kaiser Family Foundation. All rights reserved.

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