Common Denominator in Failed State Health Reform: Budget Woes

Photo by weddingssc1 via flickr.com

Despite the looming recession, it appears Washington plans to charge forward with health reform.  Many posts on our site cover the President’s ambitious agenda.

But the states may be a different story.  A round up of failed– or at least disappointing– health reform state initiatives over the past two weeks shows a consistent factor in the process: budget woes.  Many states have shown themselves to be not willing to overlook state budget crises in favor of immediate health reform.

Case in point: Washington State.  The state’s House approved a bill last week that would remove thousands of beneficiaries from basic state health care.  State officials would have authority to remove residents receiving separate benefits from the state’s Department of Social and Health Services, as well as discretionary removal of residents based on income, perceived access to private insurance, and how long a particular resident has received basic state health care.  The bill, according to the AP/Seatle Post-Intelligender, is likely to save the state $250 million (of the $9 billion annual budget gap that the state hopes to close).  The proposal is currently awaiting a vote in the state Senate.

Washington also recently imposed a new rule that would cut Medicaid reimbursements for brand-name prescription drugs– an intended savings of $1 million dollars a month.  However, two weeks ago the AP/Seattle Post-Intelligencer reported that a federal judge imposed a ban on enforcement of the new measure over concerns that it would restrict access to prescription drugs.  A hearing on May 18^th will determine whether the ban will be lifted or stayed. 

Recently in Colorado, a single-payer universal health care proposal was tabled when preliminary debate showed there were not enough votes for passage.  The AP/Denver Post reports that the measure would have cost the state at least $1.4 million over the next two years– mostly for the creation of a state-wide health care authority (not unlike those discussed in my last post).  And even though much of the cost would have been raised through gifts, grants, and donations, the Denver Daily News suggest that opposition was nonetheless concerned with the burden on the state budget and reports that State Representative Joe Rice has introduced a follow-up compromise bill that brings private insurers into the mix, which Rice hopes will keep the “price tag” for reform reasonable and quell concerns over cost.

Also this month, Missouri Gov. Jay Nixon’s proposal to expand children’s health care failed because of the legislature’s reluctance to spend, according to the AP/Columbian Missourian.

Of course, things aren’t so grim everywhere.  In Nevada the legislature rejected Gov. Jim Gibbons‘ plan to eliminate the Governor’s Office of Consumer Health– a move that would have saved less than $500,000 for the annual budget, as reported by The Nevada Appeal.

And, finally, maybe there is a “perfect storm” to be found in the timing of the recession and growing public demand for health reform.  Last December, Oxford Analytica released a report (subscription or purchase required) asserting that the momentum of health reform may actually strengthen with each day the recession stalls reform.  And one of my earlier posts touched on ways in which states have used the federal stimulus to expand health care.  In fact, just two weeks ago Rhode Island began to use federal stimulus funds to expand the eligibility of the state-managed but federally-funded COBRA program for recently unemployed residents.  You can read more about Rhode Island’s initative here.