USA: 19 States cutting healthcare

[Guest guest]

States cutting healthcare, report shows

Thu Dec 11, 2008 1:33pm EST

By Maggie Fox, Health and Science Editor

WASHINGTON (Reuters) - Several U.S. states are cutting their health

insurance coverage for residents, including the Medicaid program for

the poor, because of budget deficits, according to a report released

on Thursday.

The Families USA report found that 19 states have enacted or proposed

cuts in Medicaid, the state-federal health insurance plan for the

poor, and the State Children's Health Insurance Program, known as

SCHIP, for fiscal years 2009 or 2010.

More than 1 million people could lose all health coverage, and many

more could have their benefits reduced -- including having to pay more

out of their own pockets for care and losing dental or vision

benefits, the report said.

It calls on Congress to raise the amount the federal government

contributes to Medicaid, which covers 59 million people with low

incomes and also many in long-term care facilities, and to quickly

renew SCHIP.

President-elect Barack Obama named former U.S. Sen. Tom Daschle to be

Health and Human Services Secretary on Wednesday -- a job to include

the new role of director of White House Office of Health Reform. The

report suggests Daschle will be fighting an even bigger crisis than

when Obama made healthcare reform a major plank in his election

campaign platform.

Already, 46 Americans have no health insurance, meaning they pay for

healthcare out of their own pockets. Medicare, the federal health

insurance system for the elderly, covers 44 million people, while

states chip in with the federal government for Medicaid and SCHIP,

which covered 7 million children in 2007.

The report by the non-profit Families USA finds that states are

cutting Medicaid and SCHIP by either reducing eligibility, cutting

benefits, raising costs for members or lowering payments to healthcare

providers.

The report...noted that rising unemployment rates are costing states

money.

Jobless claims were the highest they have been in 26 years last week

-- 573,000 -- and the unemployment rate is now 6.7 percent.

" A one percentage point increase in the unemployment rate causes state

general fund revenues to drop by 3 to 4 percent, " the report reads.

" The National Governors Association and the National Conference of

State Legislatures estimate that, for the budgets for fiscal years

2009 and 2010, states face a cumulative deficit of more than $140

billion. "

Because Medicaid and SCHIP are such a large part of many state

budgets, they look like an obvious place to save -- especially since

most states are required by their constitutions to balance their budgets.

But that strategy is counterproductive, the report says.

" For every dollar a state cuts from its Medicaid or SCHIP program, it

saves only between 17 and 50 cents in state funding, but it loses

between 50 and 83 cents in federal funding and the economic stimulus

that results from those federal funds, " the report reads.

http://www.reuters.com/article/domesticNews/idUSTRE4BA5NH20081211?rpc=64