States use retiree health care, Medicaid cuts to stare down budget gaps

Mar 8 2012

State budget cuts are targeting health care and retiree health care programs in states around the U.S. In Maryland, a "doomsday" budget scenario could reduce Medicaid spending by $101 million while advocates push for reinstatement of Medicaid dollars in Idaho and Arizona.

Bloomberg: U.S. States Face 'Sleeping Cancer' In 96% Unfunded Retiree Health Benefits
The near-failure by U.S. states to fund rising retiree health-care costs for millions of government workers threatens to produce budget crises similar to the one that pushed Stockton, California, to take a step toward bankruptcy last week. States haven't financed almost 96 percent of the $627.4 billion they were projected to owe for future retiree benefits in 2010, according to Bloomberg Rankings data. The estimated deficit grew from about 95 percent in 2009 as governors coped with lower general-fund revenue and rising demand for services following the longest recession since the Great Depression (Preston, 3/7).

The Associated Press/Washington Post: State Analysts Brief Maryland Lawmakers On 'Doomsday' Budget Plan
Maryland analysts outlined nearly $800 million in potential budget cuts on Tuesday that would have considerable consequences for education, health and aid to local governments in a so-called doomsday alternative plan to Gov. Martin O'Malley's proposed budget. The plan has been presented to lawmakers in case they fail to agree on new revenues and savings needed to balance the state's books for the next fiscal year and reduce an ongoing $1.1 billion deficit by half. … Another $101 million could come from reductions in Medicaid. The state also could save $115 million by reducing funding for higher education by 10 percent (3/6).

Arizona Republic: Child Care Advocates Ask State For $100 Million For Safety-Net Programs
Child-welfare advocates are calling on lawmakers to add more than $100 million to the upcoming budget to prop up the state's safety net for distressed children. The money should be used for remedial reading programs, the reinstatement of KidsCare -- a children's health-care program -- and the replacement of federal dollars that aid needy families (Pitzl, 3/6).

The Associated Press/(New Orleans) Times-Picayune: Idaho Bill Spends $1.5M To Restore Medicaid Cuts
A bill in the Idaho House would restore a sliver of the cuts made to Idaho's health insurance program for the poor, elderly and disabled. State spending on Idaho's Medicaid program was reduced by roughly $35 million in the 2011 session as lawmakers worked to balance the budget in the economic downturn. A bill advanced Tuesday by the House Health and Welfare Committee spends $1.5 million in state funding to restore some of the Medicaid cuts (3/6).