Kaiser Daily Health Policy Report Highlights Health Issues In State Budgets

The following highlights health issues in recently released state budget proposals.
Florida: Gov. Charles Crist (R) has proposed a budget that includes $20 million for stem cell research, with a restriction that funding cannot go toward research that uses embryonic stem cells, the Miami Herald reports. Crist also proposed spending $36.7 million to establish a state stockpile of flu vaccine and $1.3 million to create a Governor's Commission on Physical Fitness. In addition, Crist's budget includes $79 million to house convicted criminals who have been ruled "mentally incompetent" and to provide community services to people with mental illnesses, according to the Herald (Miami Herald, 2/3).

Pennsylvania: Gov. Ed Rendell (D) on Tuesday proposed a $27.3 billion fiscal year 2007-2008 budget that includes a 1% increase on the state sales tax, which will be used in part to fund health care programs, the Philadelphia Inquirer reports. Under the proposal, the state sales tax would increase from 6% to 7%. Half of the revenue generated by the tax increase, $420 million, would be used to fill gaps in the general fund caused by reductions in federal health care funding, Rendell said (Worden, Philadelphia Inquirer, 2/7). Rendell also proposed increasing the state cigarette tax by 10 cents per pack and placing taxes on smokeless tobacco, pipe tobacco and cigars (Barnes, Pittsburgh Post-Gazette, 2/7). The tobacco tax increase would be used to fund the governor's Prescription for Pennsylvania health care proposal that aims to extend access to government-subsidized coverage for the 767,000 uninsured state residents. Rendell said the plan would cost $255 million in the first year, and his administration estimates abut 153,600 people would enroll in the program during the first year. The program also would be funded through federal matching funds, a 3% tax on total payrolls of companies that do not offer health insurance to workers and existing funds, Rendell said (Goldstein, Philadelphia Inquirer, 2/7).

New York: Gov. Eliot Spitzer (D) last week released a state budget proposal that would freeze Medicaid reimbursements at hospitals statewide, the Long Island Newsday reports (Ochs, Long Island Newsday, 2/6). Spitzer proposed reducing health care spending by $1.2 billion (PГ©rez-PeГ±a, New York Times, 2/6). About $1 million in cuts would be from Medicaid (Long Island Newsday, 2/6). More than $350 million of the cuts would come from reducing payments to hospitals. The cuts will reduce hospitals' revenue by 1% on average. Fifteen hospitals that treat higher numbers of Medicaid beneficiaries would absorb more than half of the cuts for all of the state's 200 hospitals, according to the New York Times (New York Times, 2/6). Hospital officials and legislators are concerned that the freeze in reimbursements might lead to layoffs or decrease the quality of care because "many hospitals already are operating in the red or close to it," Newsday reports (Long Island Newsday, 2/6).

Rhode Island: Gov. Donald Carcieri (R) proposed a FY 2008 budget that would impose a new tax on health insurers to generate $15.1 million, the Providence Journal reports. The proposal would place the tax on insurers that use more than 12% of their revenue on nonmedical expenses. Under the proposal, not-for-profit Blue Cross and Blue Shield of Rhode Island would be assessed up to 1% of gross premiums and for-profit UnitedHealthcare of New England would be taxed at a rate of up to 2% if the insurers do not meet spending requirements. According to a state insurance department spokesperson, the two insurers are exempt from the current premium tax. Carcieri also proposed a new tax on outpatient surgical, diagnostic and imaging centers to generate $4 million. Under the proposal, such facilities would be required to pay the state 2% of their gross patient revenue. In addition, the governor proposed a 10% reduction in reimbursements for outpatient care to save $1.4 million; mandating that the state pay hospitals a flat rate for emergency department care to save $1.3 million; and speeding the process by which the state and hospitals settle their accounts to save $14.1 million (Freyer, Providence Journal, 2/6).

Virginia: State lawmakers on Sunday announced "competing" plans to amend a two-year budget proposal offered by Gov. Timothy Kaine (D), the Washington Post reports. The state House Appropriations Committee proposed higher Medicaid reimbursements to doctors and hospitals. The state Senate Finance Committee announced "similar expansions of health care programs, including better Medicaid coverage for pregnant women," the Post reports. Both proposals include funding for HPV vaccines to help prevent cervical cancer (Shear/Gardner, Washington Post, 2/5).

"Reprinted with permission from kaisernetwork. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at kaisernetwork/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork, a free service of The Henry J. Kaiser Family Foundation . © 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

Buy Medrol Online no Prescription