Research by Author & Topic

Publications by John Holahan on State and Local Finance

Many of Massachusetts's health reforms have brought about positive change: the number of uninsured has fallen by half, access to needed care has increased, and private insurance has not been "crowded out" by public insurance programs. But the Massachusetts initiative has also seen higher than anticipated costs. In a new analysis, John Holahan and Linda Blumberg summarize the state's accomplishments, examine the challenges, and suggest four options for addressing long-term costs. According to the authors, much of Massachusetts's high spending growth is due to the concentration in the state's hospital and insurance markets.

In this report we examine how ten states (Alabama, California, Colorado, Florida, Massachusetts, Michigan, New Jersey, New York, Texas, and Washington) from around the nation have responded to their budget crises in fiscal year 2004. While states vary in the depth of the budget pressures they faced, all were required to make difficult choices among spending reductions, tax increases, or other revenue measures. In general, we found states with few exceptions to be unwilling to engage in significant increases in personal or corporate income taxes or sales taxes. However, other revenue measures, e.g., cigarette and alcohol taxes, were adopted more broadly. States did continue the pattern of recent years of drawing on reserves or rainy day funds, transferring monies from dedicated trust funds and shifting spending or taxes across time periods to address current shortfalls.

This brief explores the factors behind the 25% increase in Medicaid spending that occurred between fiscal years 2000 and 2002. It concludes that the spending increases have been driven by enrollment increases resulting from the loss of income and private insurance during the current economic downturn together with rising health care costs, particularly prescription drugs, which have affected the entire health care sector. Despite slower enrollment growth for the aged and disabled and for children and non-disabled adults, the aged and disabled accounted for almost 60% of the spending growth. Although current growth rates are clearly high relative to state fiscal capacity, per enrollee spending growth is below levels seen in the private health care market.

This paper provides an overview of health care reform at the state level and describes broad efforts by a number of states to enact comprehensive reform such as universal coverage, insurance reform, and cost containment. The study discusses why such reforms have proven difficult for the states and how many states are turning to large-scale Medicaid expansions as a way of addressing coverage of the uninsured. Also discussed are the major reforms in Washington, Hawaii, Minnesota, Oregon, Vermont, Massachusetts, and New York and the Medicaid expansions in Tennessee, Florida, Kentucky, Ohio, and Rhode Island.