State Medicaid Eligibility Cutbacks & Exclusions-Proposed & Recently-Enacted, 2001-04*

By Thomas P. McCormack  [draft #  27,  November 17,  2004; please discard any earlier version]

Executive Summary

During 2001-2004, many states lowered income eligibility levels, raised copays and premiums, froze new enrollments or adopted other red tape barriers to coverage for the State Children's Health Insurance (S-CHIP) program. In fact, AL, CO, FL, MD, MA, MT, TX, UT and other states at least temporarily froze new CHIP enrollments and CA’s Governor once suggested doing so too. CA, CT, MA, MN, MO, MT, NE, NJ, OH, OR TN and TX lowered family-and-children Medicaid (or related TANF or Medicaid 1115 waiver) income levels. OK, OR and TX ended their medically needy spend down programs, and AR and FL nearly did so. In TX, over 100,000 children lost health coverage and thousands did so in FL as well (but during early fall, 2004, better state finances prompted both states’ Governors, to drop some –but not all--of the eligibility barriers they’d earlier put in place and they sought funding to re-cover many children and even others). In OR and WA state budget shortages continue---threatening the removal of thousands more from Medicaid, S-CHIP and other health programs. In late November,2004, Tenncare stood at the brink of abolition by state officials reluctant to accept  courts’ constitutional and statutory limits on new benefit cost-cutting measures.

Yet AZ, DC, IL, ME, NM, NY and UT actually raised family-and-children (or related 1115) Medicaid income levels. Only FL (slightly), GA (for nursing home care), MS (with the worst attempted health cut in all American history),  OK, OR and TN cut aged/disabled Medicaid or related 1115 levels. But remarkably, AZ, FL, IL, ME, MA, MI, MO, NJ, NM, NY, PA, UT, VA and WI actually expanded eligibility for aged/disabled Medicaid, related 1115 waivers and/or state pharmacy assistance. And all states  have added  Medicaid coverage for women with breast or cervical cancer or precursor conditions (even if they’re not disabled or childless, and with no  income or asset test). 

A 2004 Commonwealth Fund survey of state pharmaceutical assistance programs (SPAPs) found that most plan to continue even after Medicare Part D permanent drug coverage begins in 2006—and are considering ways to assist poorer patients with drug copays, to provide drugs not covered by the new Part D plans or to help bridge the Part D “donut hole” of non-coverage for at least some of those with limited incomes slightly over 150% FPL. And even the current interim Transitional Assistance $600 drug cards for those under 135% FPL are already saving SPAPs millions (e. g., $150 million for PA, $90 million for NJ and $15 million for CT). 

Nonetheless, many states dropped coverage of legal aliens; cut eligibility and benefits for, or even dropped, state-only medical assistance for the federally-unmatchable poor; added or raised premiums and copays and cut "optional" services in S-CHIP and Medicaid; raised Medicaid drug copays; added preferred formularies, generics requirements and monthly number limits for Medicaid drugs; stopped “presumptive” eligibility for pregnant women (a clever back-door way to bar otherwise-federally-mandated coverage of citizen-to-be fetuses of poor illegal alien mothers) and curtailed services and enrollment in expensive home and community-based (HCB) waivers. In June,2004, after tepid federal and state funding fell far behind rising caseloads and drug costs, and over 16 states put needy HIV+ patients on "waiting lists" for their AIDS Drug Assistance Programs (ADAPs)---even though that disease is 100% fatal to those going without treatment---the Bush Administration unexpectedly provided an extra $20 million. But those funds will cover only those who were actually on waiting lists in June, 2004---with no extra funding for the many hundreds of new applicants since then or for serving thousands who face limits and reductions from other methods besides waiting lists.

More on state S-CHIP cutbacks, cost-sharing, etc. is available in Fact Sheet (#4) at  www.mchpolicy.org and “Squeezing S-CHIP” (6/04) at www.urban.org . For state-level cutbacks, etc. for food stamps, WIC, school meals, other nutrition programs and related welfare programs,  The continuing dire needs of state ADAPs are well-summarized at www.NASTAD.org . For materials offering states ”painless” methods to economize on, and even attract extra care funding for, Medicaid, ADAP, SPAPs and other related needs-based programs, email tomxix@ix.netcom.com .

Many states' budget outlooks are only now just beginning to slowly improve and quite a few still face huge Medicaid and overall budget shortfalls. They’ve spent two years of extra federal funds, their remaining tobacco settlement money and their "rainy day" budget accounts; made "easy" cuts in "non-essential" services; slashed provider payments so much that most doctors and dentists refuse to see Medicaid patients; and exhausted other available budget gimmicks. More and more have turned to, or begun to seriously consider, new or higher taxes---almost always with bitter, strong and well-organized opposition by right wing politicians and interest groups.

Alabama---a $100 million+ Medicaid shortfall led officials to call for cutting nursing home eligibility and further limiting the number of allowed Medicaid prescriptions per month. Gov. Riley’s plan for  $1.2 billion more in state taxes lost heavily in a 2003 referendum. Facing a $230 million Medicaid deficit at a minimum, the state would have to remove at least 10,000 poor children from CHIP (by December,2003, no new CHIP applications were being taken), cut at least 100 needy HIV patients from ADAP and make drastic nursing home eligibility and payment cuts. At first the Medicaid agency announced $16 million in cuts: Only 12 doctor’s visits and hospital days will be covered yearly; only 4 brand name prescriptions will be allowed monthly (but an unlimited number of generics); and even a pitifully small $3 monthly physician’s fee to care for the chronically ill will end. The state projected  a fiscal 2005 $250 million + deficit in state Medicaid funds. In March, 2004, the state Medicaid Director had to call for at least $30 million additional funds at once even to finish out fiscal 2004 without cuts so big that they’d violate federal Medicaid law. In May, 2004, the legislature enacted the nursing home bed tax and added $90 million in tobacco taxes, almost all for Medicaid---and was arguing intensely about adopting a preferred drug/ generic rule for Medicaid .And in April, CMS had agreed to about $75 million more in federal funding. Then, on July 1, the state began accepting CHIP applications again.

Alaska---Gov. Murkowski (R ) and the GOP legislature de-linked the state’s DenaliCare (CHIP) and Medicaid nursing home eligibility levels (respectively, 200% and 300% of Alaska’s extra-high poverty level and the federal SSI payment amount) so that they’ll no longer rise with the cost of living---thus freezing those levels forever at their current dollar amounts; on top of this, the state also lowered the CHIP income level from 200% to 175%, causing over 1,200 families to lose CHIP for their children. On the other hand, the Governor---robbing Peter to pay Paul by not offering any new state money---proposed a plan to give a roughly equal amount of limited drug coverage to those seniors (but not the disabled) who give up their rights to a state aged welfare program during the wait for the January 1, 2006 full implementation of the federal Medicare drug benefits. Some GOP legislators, as well as some Democrats, want to amend this to offer real interim drug benefits---and to include the disabled too.   

Arizona---in 2002, the state got another waiver to give AHCCES (waivered, expanded Medicaid) to all uninsured parents and child caretakers under 200% of poverty except for Medicare eligibles; and that same year also ended its state-funded health insurance subsidy to uninsured seriously disabled persons under 400% who are not on Medicare. Some legislators want eligibility cuts in KidsCare (CHIP) to deal with a $340 million deficit (and $1 billion next year), but a bi-partisan group of legislators and Gov. Napolitano oppose this. In April, 2004, after CMS let the state impose higher AHCCES copays (e.g., $10 per brand name drug, $5 per generic, $5 per doctor visit) legal aid lawyers secured a federal court order at least temporarily blocking them.

Arkansas---in 2002, the state dropped its optional Medicaid medically needy spend down program, but then found funds to reinstate it. In 2003 Gov. Huckabee sought and got $100 million in tobacco and income tax increases from the legislature to prevent a second attempted elimination of  the spend down, “TEFRA” coverage of severely disabled children, coverage of eye exams and glasses for adults and eligibility and payment cuts for nursing home care.

California---former Gov. Davis unsuccessfully proposed lowering the current aged/disabled MediCal income level from about $1006-- and the current SSI/SSP level from about $750—both down to about $700; and lowering the parental health coverage level from an originally proposed 200% down  to 100%, or even 61% (the federally-required minimum level, based on 1996 AFDC/MediCal income eligibility rules). Added eligibility red tape barriers will pare 200,000 parents with even lower incomes from health coverage. Yet on June 5, 2003, former Gov. Davis  authorized use of about $3 million in state funds and foundation donations to begin piggy-backing Medi-Cal and CHIP eligibility onto the school lunch program (70% of uninsured children already get subsidized lunches). Newly-elected Gov. Schwarzenegger proposed $2 billion in health and social program cuts in November, 2003---including $1.1.billion in MediCal cuts; closing enrollment for Healthy Families (CHIP), which would put over  114,000 children on waiting lists by summer; under-funding ADAP by $45 million, leaving over 700 HIV patients on waiting lists; slashing TANF grants by an average of $76 each; and even gratuitously scrapping state plans to give 5 month food stamp extensions for those leaving welfare to work  and re-imposing the prior strict food stamp car value asset test---even though the food stamp provisions actually have no costs for the state, since the stamps are 100% federally-funded. Even though in March, 2004, a state Senate committee rejected Schwarzenegger’s proposed caps and cutbacks for the Crippled Children’s, ADAP and MediCal programs, the Governor prepared a Medicaid waiver request to curtail some services, increase cost-sharing and possibly even cap future MediCal budgets..    

Colorado---in 2003, with a deficit over $1 billion, the state tightened medical criteria to get Medicaid nursing home and home-and-community-based care, threatening coverage for over 2,000 persons; and those who appeal Medicaid decisions will be denied in-person hearings. Gov. Owens signed bills to deny Medicaid to otherwise-eligible legal aliens (and a federal court hearing a challenge to the cut allowed it to be implemented in January, 2004), to children newly-applying for CHIP and to pregnant women. The Governor said in June, 2003, that he’d use $5.6 million from the federal tax bill’s money for states to prevent those CHIP cuts; but then closed CHIP to new applications as of November 1, 2003. An attempt to limit Medicaid prescriptions to 8 a month-- except for HIV, cancer and psychiatric patients, with physician override appeals allowed—was dropped within a month after an outcry from physicians about red tape and delays. The GOP legislature began to consider dropping “optional” eligibility groups and services; and there’s a House bill to limit Medicaid coverage to “priority” care, as defined by the state. In April, 2004, the Denver Health and Medical Center said fund shortages will soon make it join the University of Colorado Medical Center in cutting indigent hospital and clinic care or further raising cash copays. In May, state officials said they’d again open S-CHIP and state maternal/pregnancy care programs for new applications on July 1---but then announced an end “presumptive” eligibility for prenatal/obstetrical Medicaid care to back-door deter high enrollment from alien mothers (even though their fetuses and newborns are, and would be, fully legal natural-born citizens); in late August, the state also came up with over $2 million to add to federal ADAP funds and temporarily ease the state ADAP waiting list.

Connecticut—Former Gov. Rowland and the legislature lowered the parental Medicaid level from 150% to 100%, effective 6/30/03, are considering red tape barriers to deter and cut children’s CHIP enrollment and are seeking a CMS waiver to raise Medicaid and CHIP premiums (to between $10 and $50 monthly per family). They added copays of $1 to $3 for doctor visits and raised the $1.00 Medicaid drug copays to $1.50 and $3.00. They raised the CONNPACE (the state aged and disabled prescription assistance program) premium from $25 to $30 and its copays from $12/$15 to $16.25; imposed a $100,000 liquid asset limit; and required recoveries of drug costs from the estates of deceased beneficiaries. However, CONNPACE’s income levels weren’t lowered and a home and car of any value are still allowed. On June 30, 2003, the state ended legal aliens’ eligibility for state welfare, Medicaid, CHIP and SAGA (non-federal, state-only general assistance welfare and medical programs);  but the legislature may reverse this because of the likelihood of successful court challenges. SAGA welfare payments were reduced from $350 monthly to $200; SAGA medical assistance recipients are being forced into managed care; and the SAGA medical budget was to be capped (with unclear, but presumably negative, effects on eligibility, coverage, benefits and/or access). The state also ended Medicaid coverage of chiropractic, naturopathic, occupational therapy, physical therapy, speech therapy and psychology services for all adults. But by February, 2004, a majority of the legislature favored repeal of most if not all of the recently-imposed or -raised Medicaid, CHIP, CONNPACE and SAGA premiums and copayments.

Delaware---in 2001, an amended waiver gave Medicaid to all uninsured adults under 100%, except for disabled and aged on Medicare (who must be under the much lower $564 SSI level to get Medicaid).In January, 2004, Gov.Miner called for state-guaranteed health insurance for everyone diagnosed with cancer.

District of Columbia---since 2001 the local, DC-funded Health Alliance covers all uninsured persons under 200% except for Medicare and Medicaid eligibles; free city TB and STD clinics were to be closed in 2003; and city low income clinics were then told to stop giving free drugs to the needy aged/disabled (instead, they must be under 100%--and parents and children must be under 200%--to get drugs from Medicaid). The city hospitals’ lobby and other interests continue to delay the adoption of effective procedures to screen, and transfer to the 70%-federally-funded Medicaid program, those many Alliance patients who are actually Medicaid-eligible, causing a $30 million+ unnecessary deficit in 2003 (the emergency/urgent hospitalization bills of Alliance patients with even rudimentary eligibility documentation---“”presumptive eligibles”-- are now paid, while emergency/urgent-hospitalized Medicaid patients’ eligibility must be more thoroughly documented for payments to be made) On March 2, 2004, the DC Council enacted an Rx Access bill to offer discounts on prescriptions and medical supplies to those over age 62 with incomes under 200% and to others under 350%; but eligibility, provider, delivery and cost-sharing details must still be worked out.. By April, 2004, the Council was considering the Mayor’s proposal to fund rising Medicaid costs of the aged and disabled by a new hospital and nursing home tax---with strident opposition by hospitals, nursing homes and their employee unions.

Florida----in 2002, the state got a Pharmacy Plus waiver to give up to $160 of Medicaid drugs monthly---but not other Medicaid services--- to those over the regular aged/disabled Medicaid income eligibility level of 88% yet under 120%---but only for the aged, not the disabled; it cut the regular aged/disabled Medicaid level from 90% to 88%; it will raise drug copays, at least for the medically needy; and, on April 29^th, 2003, state legislative leaders agreed to an 11^th hour plan to continue to fund the Medicaid medically needy spend down (although that program still leaves even successful single spend downers with only $450 monthly to live on). In mid-June, 2003, the legislature voted to raise the CHIP premium from $15 to $20; to limit CHIP dental care to $750 a year; to raise CHIP co-pays for many services from $3 to $5; and to freeze new CHIP enrollment. By January, 2004, with over 100,000 children on the CHIP waiting list, the state still didn’t add funding—instead it ordered 6 month eligibility suspensions for families that miss paying even one month’s $15/$20 CHIP premium on time. On the other hand, the legislature enacted a bill to expand the Pharmacy Plus waiver to those aged  under 200% of poverty (but, again, not the disabled), but with copays equal to 50% to 63% of the Medicaid discount price, depending on each drug’s price and each patient’s own exact income . A new state policy to impose Medicaid prescription co-pays of 2.5% of retail price on drugs costing up to $300 and $7.50 for costlier ones went into effect January 1, 2004---only to be immediately suspended, at least temporarily, after an uproar from pharmacists and consumers. Also in January, 2004, Gov. Bush  said he’d use the extra $400 million in federal funds that the state got from the federal Medicaid bail-out legislation only if the legislature agreed. CHIP and Medicaid face a deficit of at least $113 million, with 100,000 uninsured children on the waiting list. He also proposed further cuts in provider payments; ending medical transportation payments for non-disabled clients served by public transit; eliminating coverage of private duty nurses at home; and ending bed-holding payments for temporarily hospitalized nursing home patients. In early 2004, Bush did propose $32 million more to move 90.000 children off the list onto CHIP; but he also wants to then freeze enrollment again; deny CHIP to children whose parents fail to enroll them in offered employer plans (unless premiums are over 7.5% of family income) ; to require full redeterminations every 6 months (which, advocates say, could cause up to 167,000 children to lose coverage) ; and to restrict future sign-ups to two 30-day windows a year. In March, 2004, he proposed using nearly $300 million out of over a billion in increased revenues to meet most of the Medicaid/CHIP deficit. But, while enacting $240 million in new tax breaks for corporations and the wealthy, the even more conservative GOP legislature countered with plans to again drop coverage of the medically needy, remove legal alien children from CHIP, slash nursing home payments even deeper and  assorted other cuts. This was followed by Gov. Bush’s plans to begin preparing a waiver to cap future Medicaid budgets. Although he said in September, 2004 that he’d end at least some CHIP eligibility barriers and even find funds to cover 37,000 more children---but high premiums and burdensome paperwork have actually reduced CHIP enrollment. 

Georgia---in 2003, the state prevented cuts for at least one year by transferring $30 million in tobacco settlement funds to Medicaid; and $18 million was switched from a now-abandoned auto plant building fund to prevent dropping 40,000 children from CHIP by adding eligibility red tape barriers to enrollment. But even after the state received extra federal aid from the federal tax bill and Governor Perdue (R) ordered state budget cuts of 2.5% in fiscal 2004 and 5% in fiscal 2005, state health programs still faced a $173 million state funds shortfall in 2004 and $376 million in 2005. So the Governor plans to end spend down eligibility for nursing home care; he lowered the CHIP income eligibility level from 235% to 200%; and he eliminated CHIP coverage of dental and vision care. Yet even with all that, there would still have been more massive Medicaid and CHIP eligibility or coverage cuts when the legislature in March, 2004, came up with an $171 million (including $57 million the Governor almost literally pulled out of a hat) for shortfalls. But the Governor still lowered the Medicaid and WIC level for pregnant women and infants from 235% to 185%, increased CHIP premiums from $10 monthly to $35 and eliminated coverage for emergency dental care and artificial limbs, spurning calls for spending remaining state tobacco funds instead to avert cuts. Announcing that Medicaid will begin using a lower ($1692 monthly) nursing home income level in July, 2004 (forcing 2,000 spend down patients off the rolls), he declined to find the mere $5 million more that could prevent the cut. While he did delay that cut by at least 90 days, he also announced plans to save money by mandatorily enrolling all Medicaid and CHIP patients (including children, the aged and the disabled) in contract HMOs. In September, 2004, State Medicaid officials announced additional cuts totaling between $172 and $328 million----which could include elimination of adult dental care, orthotics, prosthetics, hospice care and the breast and cervical cancer treatment eligibility category; cap HCB expenses and CHIP enrollment; and add cost-sharing charges to Katie Beckett waiver care.. By November, 2004 over 45,000 children had lost CHIP coverage. 

Hawaii---in 2001, an amended waiver gave Medicaid to all the uninsured under 200%, except for aged and disabled (whether or not they’re on Medicare), who must be under 100% to get Medicaid. In 2003, the state re-directed nearly $30 million from other accounts to meet a then-projected Medicaid shortfall of $90 million, leaving gimmicks and provider payment cuts as ways to handle the other $60 million. Despite budget problems, the House Democratic majority is moving bills creating a Hawaii Rx Plus program modeled on Maine Rx and mandating employer health coverage for part-time workers, with worker premium costs limited to 1.5% of salary, and setting up a state-subsidized Health Alliance plan for small businesses, the self-employed and other uninsured persons. (A 1974 law already requires all but the smallest employers to give health coverage to all employees--and their dependents-- working over 20 hours weekly.) 

Idaho---in 2003, Gov. Kempthorne proposed to raise the CHIP level from 150% to 185%, but with less benefits and more cost-sharing for the new recipients; to start a pilot subsidized health insurance plan for 1,000 adults; and to fund these expansions, and prevent cutbacks, by some increased taxes. But in early 2004, he proposed cutting state funding by $4 million for a joint state-county medical assistance program for those poor who are not in Medicaid eligibility categories and thus not federally-matchable (such programs, often called “state-only medical assistance”, are relied on by indigent, childless, newly-disabled persons awaiting SSI or Social Security disability decisions, the homeless, non-disabled childless singles and indigent undocumented aliens).

Illinois---in 2002, the state got a Pharmacy Plus waiver to give Medicaid drugs (but not other Medicaid services) to those over the regular aged/disabled Medicaid level of 100% yet under 175%---but only for the aged, not the disabled; but  the Governor might try to merge the state-funded, limited-formulary “circuit breaker” drug program for those disabled over 100% but below 175% into the Medicaid Pharmacy Plus waiver (thus bringing coverage for all Medicaid drugs to those disabled too). The state also just launched drug discount program with a $25 enrollment fee for all aged and disabled, rich or poor (with the fee waived for those already enrolled in the “circuit breaker” program) . The Governor signed a bill raising the KidsCare (CHIP) income level from 185% to 200%, and the FamilyCare (for parents and caretakers) level from 49% to 90%, effective July 1,2003. In November, 2003, the state enacted a dedicated hospital tax to help fund Medicaid and eased application red tape for KidsCare and FamilyCare. But in April,2004, the Governor still had to ask the legislature to close corporate tax loopholes to avert a $600 million shortfall in Medicaid and related programs.

Indiana---in 2001, state enacted a limited pharmacy assistance program for those over the $564 SSI/Medicaid level yet below 135% but only for the aged and not the disabled; it just got federal approval to transform the program into a Pharmacy Plus Medicaid waiver (but that will offer only a capped prescription coverage amount); and, despite court challenges, the state keeps in force a much-stricter-than-SSI “209(b)” Medicaid disability rule that one must be fatally or incurably incapacitated.

Iowa---some legislative leaders propose to solve the Medicaid funding shortage by introducing Medical Savings Accounts (MSAs) into the Medicaid program; MSAs are a controversial Medicare incentive “reform” long backed by conservatives but opposed by health advocates who believe they divert program funds away from caring for the sickest patients and shift that money into more spending cash for wealthier, healthier enrollees, In 2003, the legislature passed, and Gov. Vilsack signed, a bill raising prescription co-pays from $1 to $3 for some more costly drugs. In January, 2004, with the state still facing an enormous Medicaid deficit, the GOP House and Senate leaders called for more benefits and eligibility cuts and oppose raising liquor, cigarette or any other taxes, even if suggested by Gov. Vilsack.

Kansas---in 2001, the state created a pharmacy assistance program for those over the  Medicaid level but below 150% but only for those over age 67 and not the disabled. Gov. Kathleen Sibelius’ (D) study of rising state health care costs and ways to cover more of the uninsured led to her November,2004 proposal to raise the cigarette tax to about $1.35 a pack (plus increasing other tobacco levies) to finance CHIP for 40,000 more children, to raise the parental income level from 33% FPL to 100% and to beef up preventive services and health education. The GOP legislative majority’s response was skeptical but cautiously open.

Kentucky---a $450 million Medicaid shortfall led former Gov. Patton (D) to make $250 million in cuts in 2003---adding restricting eligibility and level of care qualification thresholds for nursing home and home and community based care. The state imposed premiums of $20 monthly on CHIP families of four with monthly incomes over about $2,300 and $30 monthly for continued Medicaid coverage after 6 months of families working their way off welfare, but the legislature killed a proposal to end the spend down. Incoming Gov. Fletcher (R ) said he’d try to end the long term care cuts, but his January, 2004 budget still doesn’t fully  address the still-big Medicaid deficit. The state Medicaid agency did order payment cuts for pregnancy and well-baby care, immunizations and screening services provided to Medicaid patients by county health agencies;  will hire a PBM to save on pharmacy costs and a “disease management” firm for other economies; and is considering raising the $1 Rx co-pay and imposing a monthly limit (override-able for proven medical necessity)on the number of covered prescriptions. At first, Gov. Fletcher refused to consider raising tobacco taxes, but then apparently relented (Kentucky has the nation’s lowest). In June, 2004, the state and Kentucky Legal Services reached a tentative settlement of the latter’s suit to roll back the nursing home and HCB waiver eligibility cuts---and to specifically reinstate over 2,500 mentally disabled clients and former clients.

Louisiana---former Gov. Foster first proposed over $383 million in fiscal 2004 Medicaid cuts, including hospital and nursing home payment cuts, closing some specialized disability centers and reducing allowed prescriptions from 8 to 6 monthly (a doctor’s signature could bypass the 6-a-month limit; but overriding the new limit of 8 will require appeal to a state body); but even so, there would still have been a 2004 Medicaid deficit of over $110 million in state dollars. His revised budget avoided eligibility and benefit cuts by transferring over $150 million from education and other state accounts to the health budget---although, with Administration support, one House of the legislature voted in May,2003, to impose a 200% of poverty eligibility level for getting free care from the State Charity Hospital System (which previously had no set income ceiling). The remaining health deficit was then met with cuts of from 3% to 15% in reimbursement to providers. Yet before he left office, Foster also was seeking a waiver to use Medicaid money to partially subsidize health insurance for all uninsured adults under 200% except for aged and disabled Medicare patients. In April, 2004, still facing an enormous Medicaid shortfall, newly-elected Gov. Blanco secured $775 million more in federal funds by getting CMS to exempt the state from complex, technical limits on gaming DSH, state  and other money to artificially boost the matching rate (there were even reports that the same funding mechanism could be resorted to next year too). But then In May, state officials estimated a $314 billion health budget shortfall---including  at least $37 million in the state charity hospital system and $240 million in Medicaid alone---for fiscal 2005 and called for even deeper provider payment cuts, the closure of 210 satellite mental health clinics, many charity hospital services and reductions in school health care..

Maine---Gov. Baldacci (D), with significant provider and bi-partisan legislative support, has proposed partially state-subsidized health insurance for small employers and individuals and raising the Medicaid income level for childless adults (including the aged and disabled) to 125% and for families to 200%, financed with some new fees and taxes and by rededicating the state’s tobacco settlement. Still, his budget proposal for fiscal year 2005 included at least $73 million in cuts to Medicaid and other measures to address the program's $137 million deficit: Ending Medicaid coverage for adult dental care; hearing aids; hearing tests; physical, occupational and speech therapy; psychological services; and prosthetics and orthotics. He also suggested re-allocations from other state programs, and some GOP legislators called for delaying the planned state health expansion program too. In the end, with only small cutbacks, minor and targeted tax increases met the funding shortfall. On the brighter side, in January, 2004, the new Maine Rx Plus program began to offer prescription discounts, of  from 25% to 60%, to individuals over the Medicaid or state pharmacy assistance income levels but under $31,440. Maine had already extended coverage to the disabled, and those over age 62, in its state pharmacy assistance program for those slightly above the Medicaid level.

Maryland---in 2003, newly-elected Gov. Ehrlich (R) unsuccessfully asked for at least $160 million in health cuts to deal with a $1 billion 2004 state deficit, including ending the right to 3 months’ retroactive coverage for medically needy spend downers (which is illegal, at least without a federal waiver) and also failed in an attempt to slash certain small, disease-specific state health programs. While these proposals flopped, some 2003 CHIP budget cuts succeeded: The state imposed CHIP premiums of up to $37 monthly (causing over 4,500 to lose coverage) and banned new enrollments for children in families with incomes over 200% (the original CHIP income level was 300%). Yet former Governor Glendenning (D) had already secured federal funding via a Pharmacy Plus waiver for the original Pharmacy Assistance Program for anyone (aged, disabled or not) under $869 monthly (with copays of $2.50 for generic and $7 for brand name drugs); got CMS  approval for a second Pharmacy Plus waiver, effective July 1, 2003, for aged and disabled Medicare patients under 175%  FPL, with a copay of 50% off  the already-discounted Medicaid retail price; required Blue Cross to use its profit-conversion windfall to fund still a third pharmacy discount program (but with small premiums, deductibles and copayments and a limited benefit cap) for Medicare patients under 300%; and established a state high risk health insurance pool.  And since January, 2003, Gov. Ehrlich---in spite of  fierce anti-tax rhetoric---actually raised state property taxes and miscellaneous fees by hundreds of millions annually. He did agree to a FY 2004 $300 million Medicaid budget increase, but also sought hundreds of millions in various social service cuts and continuance of the $37 CHIP premiums. Then, in September, 2004, his Health Secretary proposed $480 million in new cuts, mostly for CHIP and parent-and-children Medicaid and by eliminating the medically needy spend down, but also slashes in state low income clinic subsidies and even forcing rape victims to pay for their own “rape kit” crime lab work (e.g., DNA, etc.) !

Massachusetts---Gov. Romney cut funding for Prescription Advantage (which offers drugs to aged and disabled “too rich” for Medicaid) from $95 to $85 million, closed enrollment to new patients, added a $20 quarterly deductible and raised its copays for those under 188% from $6 to $12 (generics) and $30 (brand names) on 4/1/03. On 1/1/03 he ended Medicaid coverage for adults’ dentures, eyeglasses, prosthetics, orthotics, and chiropractic services and raised Medicaid drug copays from 50 cents to $2 each; proposed a $3 copay for many doctor visits and a $19 premium for all “optional” Medicaid eligibles (those not on federal SSI, who don’t meet 1996 AFDC eligibility rules and children and pregnant women over certain income levels) and on November 1, 2003 imposed a $32 monthly premium and new, higher copays for CHIP and MassHealth children. He wants Medicaid to more strictly require generics and prior authorization for multiple drugs; suggests slashing assets allowed to spouses of nursing home patients; and plans to seek recovery for Medicaid money spent on patients from their estates after their deaths. He also ended MassHealth coverage of needy non-disabled unemployed persons and 50,000 disabled persons on 4/1/03. But, in late June, 2003 the legislature acted to preserve Prescription Advantage intact and restore coverage to 36,000 of the needy, non-disabled unemployed---but tightened other eligibility rules, with higher cost-sharing, restricted some patients’ provider choices and  adopted new managed care controls. (For example, the House Ways and Means Committee’s proposals to force disabled patients with over $554 monthly income into managed care at low income clinics, with a monthly cap of $600 for their care and with disincentives on hospital admissions; to end Medicaid coverage of methadone treatment; and to abolish the Family Health Services Program for primary care, family planning and treatment of high-risk newborns may still be revived). The Governor and state legislators continue to propose that Prescription Advantage get federal matching via a Pharmacy Plus Medicaid waiver, and that it and Medicaid adopt several purchasing discount schemes. The state ended Medicaid for all legal aliens, except for children, those over 65 and nursing home cases, saving $15 million. A bill to restore this cut passed the legislature, only to be vetoed by Gov. Romney in early December, 2003; but some Democratic legislators planned an override attempt. In late January, 2004, the Governor proposed over $200 million more in health and Medicaid cuts---reducing provider payments; ending coverage for more services; abolishing state medical education and DSH-like payments to hospitals; denying SSI state supplements to legal immigrants (while imposing a tighter-than-SSI state disability test for anyone to get those supplements); and even ending Medicaid coverage of hospital outpatient clinics---but the legislature must approve this. By June, 2004, over 15,000 children were on a waiting list---because CHIP was under-funded by at least $7 million, legislative Democrats said. Then in May, 2004, Gov. Romney said state tax collections were now running at least $1 billion higher than before---and called for an income tax reduction rather than restoration of the previous health care cuts. The veto-proof Democratic legislature then countered with  budget measures that restored almost all recent years’ cuts; allowed immediate enrollment in CHIP of the 15,000 children on the waiting list; reopened eligibility to legal aliens (but only for FY 2004; they become ineligible again in 2005 and later years because the Governor’s veto on this point was not overriden) and the long-term unemployed; restored school health and public clinic cuts; and added about $3 million in state funds to the financially-pressed ADAP program. For comprehensive details see “Funding Cuts in Massachusetts…” at www.sihp.brandeis.edu/mhpf.

Michigan---Gov. Granholm (D), before federal legislation for Medicare drug coverage passed, was seeking a Pharmacy Plus waiver to give Medicaid drugs (but not other Medicaid benefits) to those over the 100% regular aged/disabled Medicaid level yet under 200%---but only for the aged, not the disabled—and, not coincidentally,  thereby secure federal matching for the present state-funded pharmacy assistance program. Former Gov. Engler’s (R ) decision to exclude parents and other related caretakers of  children from medically needy Medicaid (although not excluding those parents/caretakers who can meet 1996 AFDC or current TANF rules) has been at least temporarily blocked by a court injunction. In late 2003 the state ended almost all Medicaid dental, hearing aid (and batteries), podiatry and chiropractic coverage for adults. But Gov. Granholm and the state hospital association did agree to nearly doubling a hospital revenue tax that, with CMS approval, could be dedicated to the Medicaid budget. She also (at first vainly) proposed increasing tobacco, alcohol and inheritance taxes to the hostile GOP legislature to raise $400 million needed for Medicaid. In May, 2004, she had to propose cutting over 40,000 patients---including young adults 18 to 21 and parents and other related caretakers of poor children--- from Medicaid to save $52 million. The legislature finally did enact  the tobacco tax---but by early fall, 2004 hadn’t yet passed the alcohol and estate tax increases or proposals for more slot machine and Detroit casino taxes--- thus not yet providing Medicaid funding coverage of caretakers and 18-to-21-year-olds  and restoration of dental, podiatry, chiropractic and hearing aid services. Medicaid still faced a huge deficit.

Minnesota---Gov. Pawlenty proposed to lower the child Medicaid income level from 170% to 150% and that for pregnant women from 275% to 200%; to require already-enrolled working parents in Minnesota Care with income over 200%, and childless adults over 75%, to pay full actuarially-priced premiums (for childless adults with over $800 monthly income, premiums would go from $17 to $300, and for families of 4 over $3,000 income, they’d go from $178 to $719); to add more and bigger copays; to eliminate non-federally-aided medical assistance for those poor legal aliens not in federal Medicaid categories; and (through an Agriculture Department waiver unsuccessfully sought by the state) even establish a state-mandated menu and diet control program for food stamp families. On May 2, the Democratic Senate tried to block most of these cuts by voting instead to raise cigarette taxes by $1.00---only to be opposed in turn by the Governor and the GOP House. But by late 2003, the state had ended Medicaid and CHIP eligibility for legal aliens (even children), dropped medical supplies coverage (and capped outpatient services at $5,000 yearly) for childless MinnesotaCare patients over 75% and added so many other cuts that a state website and dedicated telephone line must explain them all:  http://www.dhs.state.mn.us/HealthCare/programs/whats-new.htmor  (651) 296-8517.

Mississippi---the state projected a deficit of nearly $400 million for fiscal 2005, while its Republican Governor and legislators rejected any tax increase. So after a Democratic plan to raise tobacco taxes failed in May, 2004, the legislature meekly passed Gov. Barbour’s (R ) bill to drop 65,000 aged and disabled from Medicaid by cutting the income level from 135% ($1068 monthly for one) to the SSI level ($564) and to reduce the monthly presciption allowance from 7 to 4 brand names plus unlimited generics. To pass the bill, the Governor’s aides promised  to seek a CMS waiver to continue to use the old 135% income level for cancer, kidney and transplant patients, plus those few aged and disabled not (yet) on Medicare. But the promised waiver hadn’t yet come through by late August---and the Governor’s  claim that the new $600 Medicare TA drug card for those under 135% would fill the breach has proven inaccurate. Growing public furor, the receipt of 65,000 Medicaid cutoff notices , a refusal by the Democratic House to adjourn without rescinding the cut, a devastating expose on PBS’ Now TV program and even an angry mob of seniors throwing tomatoes and rotten eggs at the Governor’s limousine have all forced the Governor to delay the cut-- first until  September 15 and then to October 1. In late August state officials claimed they’d secured a federal Medicaid waiver to continue using the old, higher aged/disabled income level for transplant, dialysis, chemotherapy and psychotic patients, as well as about 7,000 non-Medicare-qualified disabled clients, but were still seeking some new, extra federal funding source for the nearly 2,000 disabled HIV patients who’ll lose Medicaid but whom the state ADAP program cannot afford to add to its already-stressed caseload. (Unless they’re added to the purported Medicaid waiver, such extra federal funding is doubtful because ongoing federal ADAP formula grants are largely set by permanent statute and the Administration’s one-time use of a limited HHS account for the extra $20 million that the President  announced in early summer is restricted by its terms only to those actually on state ADAP waiting lists as of June, 2004—which doesn’t include the nearly 2,000 disabled HIV patients slated to lose Medicaid on October 1). And in  September, 2004, the Medicaid Director predicted a Medicaid shortfall next year of at least $273 million and a possible CHIP deficit of $90 million---even if an additional$103 million is appropriated, even after saving $31 million by lowering the aged/disabled Medicaid income level ---and said this could require yet more cuts. In  October, a federal court postponed the aged/disabled Medicaid income level cuts until at least January 31, 2005.

Missouri---in 2001, the state created a pharmacy assistance program for those over the aged/disabled Medicaid level yet below $17,000 but only for the aged and not the disabled. But the state rolled back the parental Medicaid income level from 100% to 77%, ended coverage for non-custodial parents who pay child support and  dropped coverage of 51,000 parents who’ve left  welfare to work. Adult vision and dental care were limited (a plan to totally drop such care was only temporarily mothballed). In January, 2004, Gov.Holden also detailed a unique, new state initiative to seek out veterans and help them enroll in VA health and income benefits ---which could shift large state welfare, Medicaid, pharmacy assistance and other health costs to the federal VA budget.. But in March, 2004, House GOP leaders proposed  cutting the family Medicaid income level from 77% to 50% and the CHIP asset level; imposing premiums for CHIP on families over 150% (the state’s CHIP level is now 300%, with only those over 225% now paying premiums); ending medical assistance for state General Relief recipients (childless, incapacitated adults, often awaiting SSA disability decisions); eliminating all adult dental, alcohol, ambulance, orthopedic, prosthetic and vision services; and imposing doctor visit copays for CHIP---on the grounds (as one GOP leader said) that Medicaid and CHIP are “unaffordable welfare” programs---instead offering $2 million in fig leaf token grants as a sop to low income clinics. To block all this, Gov. Holden called the proposed cuts “immoral”, said GOP legislators “lack a moral conscience” and proposed a state constitutional amendment to require a 2/3 vote of the legislature for any Medicaid or CHIP cuts. Then, in May, 2004, the legislature compromised with lesser cuts: lowering the parental Medicaid level to 75% from 77% and funding the aged/ disabled level at only 95% (but since state law required its rise from 90% to 100% on 7/1/04, Governor Holden raised it to the full 100% anyway); and other minor cuts. Meanwhile, state WIC officials revealed that rising prices are forcing cuts in WIC food allotments.

Montana---Gov. Martz added more and bigger copays to Medicaid and CHIP and slashed TANF (welfare) income levels by about 26%. She also proposed restrictions on  nursing home eligibility, limiting physician visits for the aged and disabled to 10 per year, dropping coverage of  hospice and home health services and tightening eligibility procedures and red tape to reduce and retard enrollment.  But when budget shortfalls and rising costs for 2004-2005 threatened to make over 1,300 children already on the CHIP waiting list wait even longer for coverage (and, at first, the state actually planned to reduce CHIP enrollment through attrition), she found funds to at least temporarily eliminate the waiting list. In late August, 2004, the state announced it was seeking what appears to be a HIFA waiver from CMS to capture federal matching funds now in order to raise its S-CHIP income level enough to cover about 10,000 more children and also to offer a watered-down-from-Medicaid subsidized health insurance package to 3,000 adults and hundreds of children who are now ineligible for Medicaid and S-CHIP but who get other publicly-subsidized mental health care. But the “price” of getting the immediately-available extra federal money through waiver would be a limit of 7% on future Medicaid program cost increases that could qualify for federal matching.

Nebraska----in 2002, the state tightened income rules for medically needy parents/caretakers, causing 15,000 to lose Medicaid (although some temporarily retained coverage for up to 12 months under a July, 2003 federal Appeals Court ruling); and it eliminated coverage of poor childless, non-disabled 19 and 20-year-olds.

Nevada---For years, the state has offered an SSI state supplement to the aged but not the disabled, making the monthly aged Medicaid income level $36.40 higher than that for the disabled. In 2001, the state created a pharmacy assistance program for those over the SSI/Medicaid level and below $21,500 but only for those over 62 and not the disabled; it ended the income disregard of unemployment insurance for Medicaid and dropped plans to end the asset test for pregnant women and child-only Medicaid and CHIP.Gov. Gunn asked the legislature for $1 billion in new taxes over the next 2 years to prevent Medicaid cuts---and got much of his request. The state Human Resources Director told the legislature that, without new funds, cuts would be needed, and Medicaid prescription and hospice coverage would have been likely first targets. In addition, a joint legislative budget committee voted to increase CHIP quarterly premiums for families at the $22,000 income level from $10 to $15 (but up to $240 yearly for the highest income CHIP families). Yet on the other hand, the state funded Ticket to Work Medicaid coverage for those disabled who leave SSI or SSDI to return to work at mid-range wages; and found funds to slightly raise the income level for the state prescription assistance program (yet while continuing to exclude the disabled under 62). In early 2004, a bipartisan group of legislators proposed using unspent CHIP money (under a waiver) and CMS health insurance risk pool grant funds to set up subsidized health insurance plans for those working for small employers and their dependents.. 

New Hampshire---in November, 2003, a legislative committee voted to slash the Department of Health and Human Services budget by $20 million, including an eligibility cutback to the Medicaid Katie Becket waiver for at-home severely disabled children; imposition of a $4,000 cap on mental health care for those whom officials cryptically refer to as “low utilizers”; the elimination of numerous state job slots; and other unspecified provisions. (New Hampshire is one of only two states in the country requiring the disabled to be even more incapacitated than SSI does to get Medicaid.) After CMS refused to approve a new nursing home tax to raise the state share of Medicaid costs—thus causing the state to fail to satisfy recent CMS regulations about allowable state methods to fund the state share of Medicaid funding--, Gov. Benson apparently secured a verbal assent to a waiver from HHS to allow some extra federal funds or otherwise-forbidden state funding schemes this year in exchange for a future cap on Medicaid (or at least its long term care) costs. The  legislature’s budget bill gave only itself---but not the Governor alone---authority to approve any  Medicaid budget cap waiver (which could leave the state with at least a $100 million Medicaid deficit in each of 2006 and 2007 year). The Governor then let the bill become law without signing it, but meanwhile the state Medicaid agency began exploring long term care cost-cutting measures (such as substituting cheaper HCB waiver care for nursing home care and preventing asset protection schemes by affluent nursing home applicants). In August, the NH Endowment for Health released a study by Cindy Mann of the Georgetown University Health Policy Centerwhich concluded that it could cost the state $100 million in fiscal 2006 and 2007 to comply with such a waiver’s federal Medicaid-financing rules; and that the state could  risk the imposition of future federal funding caps that could cut $50 to $90 million yearly in federal money should it  secure a waiver from the federal Medicaid-financing scheme rules or another waiver addressed to aged and disabled or long term care services and costs. But even after Democrat Lynch beat incumbent Benson (R ) in the gubernatorial race in November, 2004, the latter’s state Medicaid director still continued publicly calling for adoption of the waiver scheme.

New Jersey---in 2002, Gov. McGreevey lowered the health coverage income level for childless, non-disabled adults from 100% to about $240 monthly; lowered the NJ Family Care (waivered Medicaid) parental level from 200% to 133% (for some) and 25% to 37% (for others); and most recently proposed ending all coverage for otherwise-eligible legal aliens. But the state is now dropping even those parents previously grandfathered-in (those already enrolled under the prior 200% and the newer 133% levels; and eliminated hospital payments in the non-federal health program for poor childless, non-disabled adults. The Governor and legislature agreed to drop a proposal to raise the state-funded aged and disabled prescription program co-pay to at least $15 from $5, and impose a yearly deductible of $2,000, on patients with non-home, non-automobile assets over $75,000. More Medicaid cuts will come unless CMS approves the state’s Pharmacy Plus waiver application to capture $220 million more in federal matching by merging its current state-paid prescription program into Medicaid. By January, 2004, the Governor, legislators of both parties and advocates  all seemed agreed to preserve the state aged and disabled drug program to serve as a “wraparound” and secondary benefit to the newly-enacted federal Medicare prescription benefit; but three prominent state GOP Congressmen-- Ferguson, Frelinghuysen and LoBiondo—called for the state program to be preserved for “seniors” (without offering any explicit assurance of continued coverage of the disabled too). 

New Mexico--the state is implementing a waiver to give Medicaid-purchased health insurance to uninsured adults under 200% except for disabled and aged Medicare eligibles (who must be under the $564 SSI level to get Medicaid). But, faced with over $110 million in additional Medicaid and CHIP expenses for the coming year, Gov. Richardson in January, 2004, proposed slashing at least $55 million by further cutting provider reimbursements; imposing co-pays of $2, per Rx, $5 per office visit, $15 per ER visit and $25 per hospital admission ; requiring an “enrollment fee” of $25 and a $10 annual premium; eliminating transport costs for picking up prescriptions; reducing payments for eyeglasses and other medical equipment (only the most “basic”---presumably, only old-fashioned, non-powered wheelchairs will be covered); and ending non-emergency medical coverage for illegal, but otherwise eligible, aliens. Some, but not all, of these cuts can be implemented by the Governor alone, although CMS must approve waivers and the legislature also will have to enact proposed new taxes on hospital beds and HMOs..

New York---in 2001, the state got a waiver to cover all childless (even non-disabled) adults under 100%  ($776 monthly for one in 2004) except for disabled and aged Medicare patients (who must meet the lower $639 SSI/SSP level to get Medicaid). State-subsidized Healthy NY insurance for those under 250% (with a 2001 NYC premium of  about $205 for singles)  excludes those working under 20 hours weekly and Medicare patients and caps prescription coverage at $3,000. In 2003 Gov. Pataki, vainly proposed cutting the parental income level from 150% to 133% for Family Health Plus (a waivered Medicaid expansion to cover parents) and to add red tape barriers to deter and erode children’s coverage. He’d already cut the scheduled 2003 aged/disabled SSI/SSP/Medicaid level from $652 to $639 and postponed Ticket to Work Medicaid coverage for those disabled who leave SSI or SSDI to return to work from 4/1/03 until 7/1/03. His plan to save $200 million with a Medicaid formulary, drug industry rebates and prior authorization for exceptions was rejected by the legislature. In December and January , 2003-2004,  a looming $5 to $6 billion state deficit prompted many  GOP and even some Democratic officials to call for massive Medicaid cuts---or at least ending New York’s unique  practice of forcing its localities to pay half of almost all non-federal Medicaid costs.. In 2004, Gov. Pataki unsuccessfully proposed elimination of podiatrist, psychologist, audiologist, private duty nursing and adult vision and dental services and cuts of over $100 million in benefits for working TANF and ex-TANF recipients---but may well sign a bill passed by the legislature to spare localities from paying half the non-federal costs in the Family Health Plus Medicaid waiver. Beginning in the spring of 2004, an increasing drumbeat of news stories, editorials and letters to the editor in Long Island and Upstate newspapers demanded the end of New York’s unique requirement that counties pay one-half the non-federal cost of Medicaid (i.e., 25% of costs), which they reluctantly do by reluctantly raising already-high local property taxes.   

North Carolina---the proposed state budget would lower the Medicaid income level for pregnant women and infants from 185% to 151%; deny Medicaid to childless, non-disabled 19 and 20 year-olds even if they’re poor enough; and slash already-low provider reimbursement rates even further. While in May, 2004, a House-Senate budget committee called for cuts of $68 million in Medicaid services and payments; $17 million less for community mental health centers; and $10 million less for child health programs, the legislature later appropriated nearly $2 million to at least temporarily eliminate the state’s huge ADAP waiting list.  

Ohio---To save at least $50 million, Gov.Taft proposes lowering the parental Medicaid income level from 100% to between 70% and 90%, eliminating adult dental, vision, podiatry and psychologist services and making big eligibility cuts in the state-funded Disability Medical Assistance Program. In 2003, the state mandated $3 co-pays for drugs not on its Medicaid “preferred” list; there are no co-pays for “preferred” drugs. (Ohio’s aged/disabled Medicaid income level--about $450 monthly for one person--is already the nation’s lowest.) On the other hand, in late 2003, the state enacted an “Ohio Best Rx” state-sponsored drug discount program to offer prescriptions at up to 40% off retail price to any resident (aged, disabled or not) with income under 250% ($1870 monthly for one person). In late July, 2004, state welfare officials announced a cut of between $57 million and $200 million in state funding for county eligibility determination activities for Medicaid, welfare and food stamps---resulting from a major state-level accounting error that improperly used non-state-matched federal TANF block grant funds for such county eligibility sand administrative costs..

Oklahoma---in 2002 the state cut the Medicaid level from 185% to 115% for children 6 to 18, from 185% to 133% for those 1 to 5, and from 100% to the SSI level ($564 monthly in 2004) for the aged disabled and ended the medically needy spend down for families and children on 2/1/03. In 2003 it re-imposed a “3 prescriptions-a-month” limit, entertained (but didn’t enact) the near abolition of its CHIP program and  even further lowered the Medicaid level for children over 1 down to 100% and dropped even the nursing home and home and community waiver eligibility level down to the SSI level ($564). But in February, 2004, Gov. Henry proposed a 52 cents-a-pack cigarette tax referendum to protect Medicaid and expand health coverage to 200,000 more persons and he got the legislature to enact a bill to add Medicaid coverage of women who screen positive for breast and cervical cancers or precursor conditions.  (Oklahoma had been the last state without such coverage).

Oregon---voters mandated massive Medicaid cuts in a 2003 tax referendum; Childless adults not on SSI under 100% lost Medicaid benefits except for a watered-down package, and uninsured parents over the 1996 AFDC/Medicaid levels or current TANF levels but below 185% (who’d only just been covered by a waiver) lost all coverage. Emergency loans of $340 million from tobacco settlement and education reserve funds only temporarily staved off most but not all non-substance abuse, non-mental health drug coverage--but not other services. With only $92 million the extra emergency federal Medicaid money for each of only two years, Gov. Kulongoski had to end the medically needy spend down  for everyone except transplant and HIV patients. An emergency, bipartisan $800 million tax package enacted by the legislature in late summer, 2003 was repealed in a February, 2004 referendum called by right wing anti-tax radicals, threatening even more draconian cuts such as dropping all remaining, watered-down coverage of “optional” eligibility groups (aged and disabled over the SSI level; parents over the 1996 AFDC or current TANF levels; pregnant women and infants over 185% of poverty; children under 6 over 133%; and  children 6 to 19 under 100%) ; dropping all or most “optional” services (such as prescription drugs; private duty nursing; some home health care; home and community based services; adult podiatry, dental care, dentures, eyeglasses and hearing aids; nursing home care;  prostheses; physical, speech and occupational therapy; and private duty nursing). In late February, 2004, a debate began about how to use over $60 million in enacted, but heretofore-overlooked,  hospital taxes which were designed to leverage additional federal Medicaid matching funds via the state’s existing waiver and that were left untouched by the referenda: Hospitals insisted these taxes were, and must continue to be, dedicated only to paying for inpatient care of Medicaid-ineligible adult indigents; while some health advocates (with some support from the Governor) preferred to spend the money instead on coverage of  needy pregnant women and children-- and on outpatient drugs for the disabled and aged—whose coverage was cut by the referenda. The hospitals threatened to sue and to challenge any waiver amendment approval by CMS if they don’t get their way.  Then, in June, 2004, state officials stopped taking new applications for the “Standard” Oregon Health Plan (any persons under 100% FPL who are not on TANF or SSI, whether or not they’re aged, disabled, parents or children) which must cut enrollment by over  half to meet budget limits. The new Kaiser Commission on Medicaid and the Uninsured report, The Impact of Recent Changes in Health Care Coverage for Low-Income People: A First Look at the Research Following Changes in Oregon's Medicaid Program http://www.kff.org/medicaid/7100a.cfm , summarizes key findings on the impact of Oregon's changes. CMS approved most of these changes to the state’s waiver, effective August 1, 2004: Existing waiver eligibles under 100%, even if they’re not on SSI or TANF, will get a watered-down health package with doctor visits, limited inpatient coverage, outpatient drugs but without long term care, home health and HCB services, podiatry, non-emergency adult dentistry, hearing aids, eyeglasses or other “extras”. Yet by early September, a last minute rush by potential waiver eligibles to enroll---even in spite of raised premiums of $6 to $20 per family, prevented the expected enrollment attrition by what was needed to meet funding limits---and state officials were considering further program reductions.

Pennsylvania---in 2002, the state used windfall tobacco money to offer very, very inexpensive health insurance to all uninsured adults under 200% except Medicare patients; but this insurance has no pharmacy benefit!  But by September, 2004, 100,000 persons were on a waiting list to enroll in the plan because so many others had already signed up, using up available state funds. In May, 2003, Governor Rendell (D) and GOP legislative leaders agreed to raise the income levels for the state’s aged-only PACE And PACENET prescription assistance programs for those slightly “too rich” for Medicaid, but failed to expand it to cover the needy disabled under age 65 too. Even though the state may save as much as $150 million in PACE funds during 2004 and 2005 from the advent of the federally-funded $600 drug cards for those under 135% FPL, state officials made no effort to use the savings to extend  PACE to the under-65 disabled or to fund more slots to cover the 100,000+ persons on the waiting list for state-subsidized health insurance (which, by the way, also lacks a drug benefit).

Rhode Island---since 2002, budget pressures have led state officials to call for closing enrollment or lowering the 185% income level for parental coverage in RIghtCare (the state’s  waivered Medicaid/CHIP expansion). The legislature added limited coverage of disabled persons over 55 to its previously aged-only, limited-formulary pharmacy assistance program; by paying a premium, they’ll get 15% off the already-heavily-discounted state pharmacy assistance program’s retail price for those drugs on the limited formulary. The state is also seeking federal approval of a Pharmacy Plus waiver to capture federal Medicaid matching funds for the drug program. By April, 2004, Governor Carcieri ( R) had called for a $50 cut in benefits for each poor family receiving child support.

South Carolina----in 2002, the state raised the income level for Medicaid drugs (but not other Medicaid benefits) from 100% to 200%---but only for the aged, not the disabled. Faced with a $400 million 2004 deficit, Gov. Sandford raised copays for less needy families on Medicaid and CHIP; reduced  allowed Medicaid prescriptions from 4 to 3 monthly; and made other cuts. At first insisting on income tax cuts for the wealthy as his price for agreeing to an increased cigarette tax, he later dropped that demand to support the cigarette tax increase--- but then refused to earmark  the new revenues for Medicaid only. Meanwhile, the state instituted copays of  $2 for physician visits; $3 for dentists; $3 for medical equipment; and $1 for optometrists, chiropractors and podiatrists (it already had prescription copays of $3, the highest that’s federally allowed). In December, 2003, Gov. Sandford and GOP legislative leaders warned that they wouldn’t fund Medicaid without significant “reform” (a code word for eligibility cuts, higher cost-sharing, reduced services and/or privatization). In the spring of 2004, a state cancer care assistance program effectively collapsed when years of static under-funding caused most hospitals to cease participating and even its administrators gave up; the state was negotiating with CMS for $125 million in added funds; and  Gov. Sandford’s now-revived plan to cut income taxes rates for the wealthiest (by nearly half) was being favorably considered by the legislature.

South Dakota---Gov. Rounds and the legislature created a state-sponsored prescription discount program for Medicare patients, and as of July,2003, were working to establish a state high risk health insurance pool.

Tennessee----in 2002, the state lowered the Tenncare (a waivered, expanded Medicaid that once covered all the uninsurable, including the HIV+ “pre-disabled”) income level from 400% to 100%, while “grandfathering-in” former eligibles if they re-applied within one year of the change (further extensions were later granted). SSI recipients still get benefits like Medicaid in other states; but the “grandfathered-in” pre-disabled, the aged and disabled over the SSI level but below 100% and parents over the TANF/Medicaid level but below 100% get only a watered-down Medicaid similar to private  insurance (with small premiums, and higher deductibles and copays than those on SSI or TANF). The state also adopted a “preferred” drug list to force more use of generics or inexpensive brand alternatives. By late 2003, Tenncare  planned raising Medicaid prescription co-pays from $1 to $3 (or even $5 for some brand name drugs if approved by CMS); raising drug co-pays for non-Medicaid, waiver-expansion Tenncare patients from $10 to $15; and cutting some payments to non-DSH hospitals. In May, 2004 the legislature enacted these and other benefit cuts and higher cost-sharing but no more eligibility cuts---which still leaves the next Tenncare budget up by over $1 billion (one-third state funds). Except for pregnant women, children and HIV+ or physically disabled persons, doctor’s visits will be limited to 10 yearly, hospital days to 45 and prescriptions to 6 monthly; antihistamines like Claritin, gastric antacids like Nexium and other costly drugs with cheaper over-the-counter alternatives---but also the costly schizophrenia drug Zyprexa and some other mental health medications--- won’t be covered ; and co-pays of $5 per ER visit may be imposed too (with co-pays up to $40 per doctor visit possible for non-Medicaid waiver expansion eligibles). Consumer advocates oppose these cuts, urged CMS to veto any waiver alterations and filed a suit; but the Governor said that, if consumer groups did block his changes, it could result in the total abandonment of the whole Tenncare waiver expansion---with Tenncare then reverting to bare minimalist Medicaid coverage. Then, in August, 2004, the Governor sought to conciliate advocacy critics by announcing that all children under 21 (whether they’re Medicaid, CHIP or waiver eligibles) would be exempted from cost-sharing (including even premiums for waiver expansion eligibles), benefit reductions and pharmacy formulary restrictions (they can even get allergy and antacid prescriptions when equal and cheaper over-the-counter products are available) ---but didn’t address grave and serious problems identified by advocates concerning limits on care and the inadequacy of  EPSDT. On October 27,2004, this resulted in a federal court order requiring the state to more fulsomely implement Medicaid EPSDT, drop financial and “medical necessity” limits on children’s covered care,  raise children’s provider fees and adopt other program reforms---even if such measures are not included in the waiver or submitted to, or approved by, CMS. The Governor declared that the order, if it stands, will undermine the new waiver, the whole original Tenncare expansion and raise state costs so much that massive state cutbacks will inevitably result in 400,000 losing coverage. By November state and consumer advocates were engaged in difficult negotiations to reach agreement, both sides setting, then extending, 7 day deadlines for one another.   

Texas---In 2003 Gov. Perry pushed through most of  a 6% biennial cut in the Medicaid budget---$1.5 billion, counting in lost federal matching funds) The state had barebones eligibility coverage to begin with: Only SSI recipients, nursing home and home and community-based waiver cases under $1656 monthly, parents under 133% of the TANF level and children under 200% of poverty were covered; and only parents and children whose original incomes are too high—but not childless disabled or aged---could spend down to get Medicaid. The legislatively-approved Governor’s budget ---among other cuts--- eliminated CHIP coverage of prostheses, physical therapy and private duty nursing; tightened CHIP asset eligibility rules; imposed $10 to $20 copays for CHIP doctor visits and prescriptions; raised CHIP enrollment premiums to prohibitive levels; counted income for CHIP more strictly; imposed a 90 day waiting period for newly-eligible CHIP patients; reduced Medicaid home health coverage for the aged and disabled; ended the Medicaid medically needy spend down for families and children (the childless aged and disabled never could spend down in Texas); reduced the pregnant women’s Medicaid income level from 185% to 158% (enough to drop 8,300 women monthly); and terminated Medicaid coverage of eyeglasses, hearing aids, chiropractic services, podiatry and some adult mental health care. Even after all this threatened over 100,000 children with loss of  health coverage by January, 2004, the Medicaid agency then proposed additional cuts, including limits of $5,000 for liquid assets and $15,000 for a car’s value (with 2^nd cars worth up to about $4600 allowed) for CHIP. By March 28, 2004, premiums for over 25,000 of the  remaining 325,000 CHIP patients were late and the state threatened to remove them from the rolls. In June, 2004, a federal judge permanently enjoined enforcement of the state’s so-called  “personal responsibility” law  that denied Medicaid to parents who abuse drugs or alcohol or whose children are truant or miss immunizations or medical or dental checkups. Yet by April 1,2004,  Texas CHIP had, in the first quarter, already consumed two-thirds of its annual drug budget, even with the cutbacks, and the Health and Human Services Commissioner conceded that Medicaid and CHIP still faced a $575 million annual shortfall. In August, 2004, Gov. Perry  added $561 million to the Medicaid and CHIP budgets---allowing him to again restore the 185% pregnant women’s Medicaid level , restore some doctor payment cuts, increase funding to hospitals with high indigent patient loads and meet about half of the remaining Medicaid and CHIP shortfall. He also said he’d consider a delay in dropping children whose parents have become delinquent in paying newly-imposed or -raised premiums from S-CHIP. In October, 2004, state health budget officials announced that Medicaid and S-CHIP needed huge additional appropriations just to keep pace with enrollment increases and to fulfill a rate increase promised to doctors (which they implied they’d support). 

Utah---in 2002, the state secured a “HIFA” waiver to give watered-down Medicaid (no hospital, specialists’, nursing home, home health or other ancillary services; high drug and other copays) to all uninsured adults under 150% ---which was expanded in June, 2003 to include payment on their behalf of otherwise-unaffordable premiums in any employer-offered health plans---except for disabled and aged Medicare eligibles (who must be under 100% to get full, regular Medicaid). The state also ended Medicaid coverage of podiatry, speech therapy, audiology, occupational therapy, physical therapy, vision and adult dental care and reduced chiropractic coverage for all adults. A  2001 freeze on new CHIP enrollments that’s left over 7,000 children on a waiting list may be ended by an early 2004 House-passed bill to drop the asset test for children’s Medicaid, thus transferring over 7,000 children whose families are income-eligible, but asset-ineligible, onto it and off CHIP (which has no asset test). The 7,000 freed-up CHIP slots could then go to the children now on the CHIP waiting list, and the $2.3 million state cost would be met by off-budget tobacco settlement funds. In May, 2004, state officials said other new funds may allow for restoring coverage of adult dental X-rays, fillings and root canals.

Vermont--in 2001, the state altered a waiver to give “chronic need” Medicaid drugs---but not other Medicaid services--- to aged and disabled under 175%; but they must be under 100% to get full, regular Medicaid; and Gov. Douglas proposed adding an assets test for waiver coverage of parents and childless adults (plus imposing deductibles on those with incomes over 50%) and for the state-funded prescription assistance program.

Virginia---with an enormous recession and structural deficit, in 2002 and 2003 Gov. Warner (D) found funds to protect and streamline CHIP, preserve the state’s 80%-of-poverty aged and disabled Medicaid income level  (which had only recently been raised from the much lower SSI level) and confine Medicaid cuts to provider payment reductions. And after an unusual three-way struggle over tax increases and the budget—Governor Warner and legislative Democrats vs. the House Republican majority vs. the Senate Republican majority-- that lasted for the first half of  2004, over $1.3 billion in new sales, tobacco and corporate taxes were enacted---enabling Virginia Medicaid to slightly raise hospital and nursing home payments, maintain current eligibility levels and even fund 700 more slots in home and community-based waivers for the mentally-challenged. Also, Warner said the stabilized finances are allowing him to enroll 100,000 more children in Medicaid and CHIP and increase obstetrical fees 34% to promote their participation and patient access to care (this is also a great, but so far sorely un-addressed, need in almost all other states too). Yet by September, 2004, an actuary reported that the  state’s fund for lifetime care of children deprived of oxygen at birth, or with birth-related neurological disabilities, faces a long term deficit of nearly $100 million. This non-needs-based  program was created by the legislature to mandate an alternative to medical liability litigation against obstetricians, hospitals and doctors in general; is funded by assessments on them and their liability insurers; and Florida alone has such a plan too.

Washington---the state  “re-allocated” funds needed to pay the SSI state supplement--making the SSI/SSP level, which is also Medicaid’s, drop from an expected $577.90 to $552 on 1/1/03--causing 3,000 aged and disabled to lose Medicaid. It added red tap barriers to Medicaid and CHIP to restrain and erode enrollment; discontinued telephoned applications; dropped even legal alien children from Medicaid and CHIP; and enacted a bill to raise CHIP premiums from $10 to $25 monthly (and required premiums for 160,000 Medicaid families). Gov. Locke proposed excluding childless adults (whether or not disabled) from the state Basic Health Plan, which subsidizes discounted premiums for those under 200% who are not on Medicare or Medicaid; bigger copays for other Basic Health patients; ending Medicaid coverage of adult dental and vision care; and ending state medical assistance for non-federally-matchable poor adults and for 28,000 otherwise-eligible legal alien adults. Some legislators wanted even more cuts, given the huge state deficit. The state actually created a special coverage cutbacks website at http://fortress.wa.gov/dshs/maa/Programchanges2003/ .Even though the legislature authorized increased premiums for Medicaid and CHIP ($10 to $45 monthly per family) for 73,000 families, to begin in June, 2004, Governor Locke postponed them until next year at the earliest. Nonetheless, by November, 2004, 25,000 single adults had been cut from Basic Health and 40,000 children, parents, aged and disabled lost Medicaid---with the state still facing an overall $1 billion deficit. 

West Virginia---Gov. Wise’s proposal to raise the tobacco tax and dedicate it to forestalling otherwise-necessary Medicaid cutbacks was passed by the legislature; it could forestall cutbacks for at least one year. On the other hand, the state cut its already pitifully-low TANF welfare payments by 25% beginning July 1, 2004.

Wisconsin---in 2002, by getting a Medicaid Pharmacy Plus waiver, the state raised the income level to get Medicaid drugs (but not other Medicaid services) from the regular $628 SSI/SSP/Medicaid level to 200%---but only for the aged, not the disabled. In the face of a $3.2 billion state deficit, it was at first feared that CMS’ rejection of Gov. Doyle’s request for $408 million more in Medicaid funds might require reducing the 185% income level for BadgerCare (waivered Medicaid and CHIP for parents/caretakers under 185%, even those on Medicare). But in May, 2003, a state legislative budget committee voted to avert most pending cuts (after Congress offered $20 billion to states in the tax cut bill) by using only $150 million of Wisconsin’s $280 million allocation and by raising a nursing home tax but also by increasing the Senior Care prescription assistance program’s (now funded as a Medicaid Pharmacy Plus waiver) premium from $20 monthly to $30, its brand name copayment from $15 to $20 and its deductible for wealthier clients from $500 to $850; by raising the Badger Care premium from 3% to 5% of family income; and by dropping plans for expanded home health and home and community based waiver services. The Governor’s proposed 1% tax on HMOs was rejected by the legislature. On January 15, 2004, a state fiscal agency predicted a possible Medicaid deficit of as much as $400 million---especially if CMS rejects the state’s attempt to now receive matching funds for certain past health costs it says should have been, but weren’t, originally claimed as Medicaid’s. While few state officials expect to get all the claimed funds, even GOP legislators say that significant eligibility cuts are unlikely. In late February, 2004, the legislature approved a measure bridging about $123 million of the $400 million health budget deficit. But while in March, 2004, the GAO questioned whether the state might have improperly claimed over $800 million in complex, technical DSH-related Medicaid matching funds, CMS agreed to at least $50 million more in federal funding through the state’s use of intergovernmental transfers or similar devices---still leaving, according to news stories, a Medicaid budget shortfall of over $200 million for fiscal 2005...

Wyoming---Governor signed a bill to seek to replace the current state Prescription Drug Assistance Program (which covers anyone---whether aged, disabled or not--- under 100%) with a Pharmacy Plus waiver, once approval comes from CMS, to give Medicaid drugs only to Medicare patients under 175%.

For the 48 states & DC, the 2004 poverty level is $9310 yearly ($776 monthly) for one plus $3180 yearly ($265 monthly) for each additional family member; levels are higher in Alaska & Hawaii (see www.dhhs.gov ).