Stateline Story

Rx Aid, Medicaid Woes Top Health Policy Concerns

In the last 12 months, state health policy makers have had to deal with tighter budgets, a situation worsened by the events of Sept. 11. Despite monetary shortfalls, lawmakers in many states created some new health programs, and reshaped some old ones during the course of 2001.

Cancer Treatment For Women

Women's health advocates scored big on the issue of breast and cervical cancer.Thirty one states okayed cancer treatment laws that authorize paying for poor women's treatment. Until this year, states had money set aside to screen women, but not necessarily treat them if they were diagnosed with cancer.

State budget analysts were surprised at how quickly lawmakers signed on to the treatment program, and say the lawmakers could be in for a shock "States will be surprised because costs will be higher (than what is projected). There wasn't much information to estimate costs and states did the best they could," says Vic Miller of Federal Funds Information for States, a DC-based group that monitors state spending.

Projected state costs for the next fiscal year range from $50,000 in Alabama to $12,900,000 in Florida.

Access To Prescription Drugs

Thirty-one states now have some type of prescription drug assistance program for seniors, compared with 22 last year, the National Conference of State Legislatures reports. Most programs use state money, including tobacco settlement funds, to help pay the cost of prescriptions for residents who meet age and income criteria. Some states also have beneficiaries pay part of the cost in the form of co-payments, annual enrollment fees or monthly limits.

Buying groups or purchasing pools, in which states band together to try to get better prices, have become popular. Lawmakers in three different regions of the countrythe Northeast, West Virginia and the Pacific Northwestare in the early stages of trying such plans. The groups are not geographically exclusive: representatives from Washington State and Wyoming have attended the West Virginia-sponsored meetings.

Four states have raised the ire of the prescription drug industry with their cost-cutting maneuvers. The Pharmaceutical Research and Manufacturers of America, or PhRMA as the trade group is known, has filed lawsuits aimed at state plans in Florida, Maine, Michigan and Vermont. PhRMA's suit against Maine dates back to 2000 and was pending before the Supreme Court as 2001 ended.

Lawsuits against the drug industry over alleged price gouging were filed this year in California and West Virginia. Texas led the way with a similar price-gouging suit against three pharmaceutical companies in 2000. Nearly 30 states, led by Michigan and New York attorneys general, joined an antitrust suit last summer alleging Hoechst pharmaceutical company blocked a generic version of Cardizem CD, a heart medication, from coming to market in 1998.

The adversarial stance between big business and the states will continue, experts say. "Some states such as Nevada (which has the country's first private prescription drug insurance plan) are providing assistance to seniors, including better access to prescription drugs," says Marjorie Powell, PhRMA assistant general counsel. "At the same time, a number of states are taking steps to restrict access altogether in state Medicaid programs. Those two competing threads will go on over the next year as well."

Medicaid Budgets

State officials are singing the blues about Medicaid budgets. The Sept. 11 attacks worsened a bad situation by diverting money to anti-terrorism that could have otherwise been used for Medicaid, the Kaiser Commission on Medicaid and the Uninsured, a nonprofit health policy group, says. Medicaid is a state-federal health benefit program that covers 40 million low-income women, kids and other needy people.

Medicaid directors across the country have been directed by governors to plan for spending cuts that go beyond what legislatures have already okayed.

Georgia will cut $33 million in state money out of Medicaid this year and $66 million next year. Iowa officials say the projected cut is more than $18 million and in North Carolina reductions total $44.4 million in general funds (including $21 million for prescription drugs). Late in the year, Arkansas announced budget cuts totaling $33.4 million.

With cuts this deep, Medicaid officials are trying to protect state residents and tighten program requirements instead of wiping out entire services. In Connecticut, which went from a $600 million budget surplus before Sept. 11 to a $301.7 million budget deficit, Medicaid director David Parrella says the state plans to partner with private industry to help pay for health insurance programs. Connecticut will also introduce a formulary, or a select list of drugs the state will pay for, in its elderly prescription drug assistance program known as ConnPACE.

The Kaiser Commission's Diane Rowland says she sees a very different climate in Medicaid programs than what used to exist. "A year ago we were talking about program expansions, but we're now talking about ways to maintain what we have. We have to try and figure out how to put resources to their best use and try and not add another 10 million uninsured to our population," she says.

In other health policy developments this year:

  • Indiana, Kansas, Kentucky, Maine, Mississippi, Montana, Nebraska, New Hampshire, New York, Oklahoma, Oregon, Rhode Island, Texas, Vermont and Wyoming addressed medical privacy and consumer health information through laws or regulations.
  • Taking aim at the childhood obesity epidemic, California enacted a law to ban some beverage sales in elementary and middle schools.
  • States' rights took a hit when Attorney General John Ashcroft issued a Drug Enforcement Administration directive that put Oregon's assisted suicide law on hold. Ashcroft called for DEA agents to identify and punish doctors who prescribe federally controlled drugs to help terminally ill people die.
  • In California, federal officials decided to crack down on so-called medical marijuana buyer's clubs. California is one of eight states that have legalized the medical use of marijuana.
  • North Carolina Gov. Mike Easley signed a patient's bill of rights bill into law in October, making his state the 46th to give more legal power to health care consumers.
  • Voters in Maine okayed an initiative in November that calls for a universal health care system.
  • In response to rising health care costs, several statesColorado, Maryland, Minnesota, Montana and Utahpassed laws to require studies of the insurance market.
  • Indiana Gov. Frank O'Bannon signed a law encouraging schools and local governments to buy calcium-rich foods.
  • Lawmakers went into special session in West Virginia to address doctors' concerns about medical malpractice insurance. The Legislature okayed a plan in early December to offer state backup insurance and change some lawsuit regulations.
  • Maine and Washington voters said "yes" to increasing cigarette taxes. Washington's massive increase raised the excise fee on cigarettes by 60 cents to $1.42 a pack, making the state the highest tobacco-taxing state in the country, with New York a distant second at $1.11 per pack.

Given state budget shortfalls, it's unlikely that states will expand or create many new health programs in 2002. But as lawmakers struggle with increasing numbers of uninsured, they may well reshape and tweak programs to make sure residents are covered. Prescription drugs will remain a high-priority issue as states look to cut costs. Legislators are also expected to examine public health laws and address bioterrorism in light of the events of Sept. 11.