States Make Deep Cuts to Health

  • August 05, 2009
  • By Pauline Vu

Although states are facing their worst fiscal crisis since the Great Depression, 14 found the dollars this year to increase health coverage for about 250,000 children.
That's one of the few bright spots for health within state budgets in a year in which all but a handful of states faced shortfalls and were forced to shrink taxpayer-financed programs.
The 14 states – Alabama, Arkansas, Colorado, Indiana, Iowa, Kansas, Montana, Nebraska, North Dakota, Oklahoma, Oregon, Rhode Island, Washington and West Virginia – took advantage of an additional $33 million that Congress appropriated when it reauthorized the Children's Health Insurance Program (CHIP) in February. At the same time, President Obama rescinded a Bush administration directive that had hampered states' ability to expand coverage for children whose families earned too much to qualify for Medicaid but too little to buy their own health insurance.
“It is reassuring that states recognize the value of providing health care to children, perhaps especially during an economic downturn,” said Jennifer Tolbert, a policy analyst at the Kaiser Commission on Medicaid and the Uninsured.
States have an incentive to invest more state dollars in CHIP because they only pay 30 cents of every dollar spent in the program; the federal government picks up the rest. By comparison, states pay an average of 43 cents of every dollar spent on Medicaid, another joint federal-state venture that covers low-income people.

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