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State Fiscal Conditions and Health Policy
Health Care Coverage
Acute Care Issues
About the Editors
The past five years have given states new opportunities in health policy for lowincome people, yet also put new pressures on policy formulation. State flexibility increased as a result of many developments, including welfare reform and the delinking of Medicaid from cash assistance, new funding for children's health insurance coverage under the State Children's Health Insurance Program (SCHIP), repeal of federal minimum standards for nursing home and hospital reimbursement that had constrained states' control over Medicaid payments, and federal willingness to grant waivers under Medicaid (and now under SCHIP as well). Fiscal capacity also rosethe result of booming revenues during the long economic expansion of the 1990s and new tobacco settlement funds.
But new pressures on revenues and state policy have arisenfrom recent federal economizing under Medicaid and Medicare, including cuts in safety net support that some states were believed to have abused; from political pressures for state tax cuts; and, starting in 2001, from a recession. New pressures were also generated by the Supreme Court's Olmstead vs. L.C. decision, which detailed a limited right to homeand community-based services under the Americans with Disabilities Act; rapid growth in spending on pharmaceuticals; and by the difficulties encountered by Medicaid managed care. Political demands for public action sprang from developments such as the rise in numbers of uninsured people, the growth in private and public managed care, increases in the costs of pharmaceuticals, and many hospitals' fiscal
woes, as well as from events specific to each state.
To learn how states have responded to federal constraints and state flexibility during the past three years, the Assessing the New Federalism (ANF) project of the Urban Institute examined state priority-setting and program operations in health policy affecting the low-income populations in 13 states: Alabama, California, Colorado, Florida, Massachusetts, Michigan, Minnesota, Mississippi, New Jersey, New York, Texas, Washington, and Wisconsin. A series of case study reports were developed that focus on changes in health care policy in each state, building on earlier baseline studies in the same states.1 Information for the case studies was obtained from publicly available documents, newspapers, web sites, and interviews with state officials, provider organizations, consumer advocates, and other stakeholders. In-person interviews in state capitals were conducted from February through June 2001. Questions were asked using an open-ended interview protocol, and state officials were given the opportunity to comment on the draft reports. Additional information was obtained to update the status of each state through roughly the end of 2001.
Four major sets of issues are addressed in this set of reports. First, how have the political and fiscal circumstances of the states changed over the past several years? Second, has the state expanded public or private health insurance coverage, whether through Medicaid, SCHIP, Medicaid research and demonstration waivers, or state-funded programs? Third, how have Medicaid managed care and other acute care issues changed? For example, has access been affected by managed care plan withdrawals from Medicaid or backlash against plans by providers or beneficiaries? Fourth, how are states responding to pressures to expand home- and community-based services for disabled persons, their new freedom to set nursing home reimbursement rates, and the labor shortage?
This report provides brief summaries of the findings from each state. Not surprisingly, states differ considerably in terms of their long- and short-term fiscal circumstances
as well as their policy objectives. Therefore, it is difficult to draw conclusions that would apply in all states. Nonetheless, the following key points emerge from the state summaries.
1. All of these reports are available from The Urban Institute, Washington, D.C.: Barbara Ormond and Alyssa Wigton, Recent Changes in Health Policy for Low-Income People in Alabama; Amy Westpfahl Lutzky and Stephen Zuckerman, Recent Changes in Health Policy for Low-Income People in California; Jane Tilly and Julie Chesky, Recent Changes in Health Policy for Low-Income People in Colorado; Alshadye Yemane and Ian Hill, Recent Changes in Health Policy for Low-Income People in Florida; Randall R. Bovbjerg and Frank C. Ullman, Recent Changes in Health Policy for Low-Income People in Massachusetts; Jane Tilly, Frank C. Ullman, and Julie Chesky, Recent Changes in Health Policy for Low-Income People in Michigan; Sharon K. Long and Stephanie Kendall, Recent Changes in Health Policy for Low-Income People in Minnesota; Barbara Ormond and Frank C. Ullman, Recent Changes in Health Policy for Low-Income People in Mississippi; Randall R. Bovbjerg and Frank C. Ullman, Recent Changes in Health Policy for Low-Income People in New Jersey; Teresa A. Coughlin and Amy Westpfahl Lutzky, Recent Changes in Health Policy for Low-Income People in New York; Joshua M. Wiener and Niall Brennan, Recent Changes in Health Policy for Low-Income People in Texas; John Holahan and Mary Beth Pohl, Recent Changes in Health Policy for Low-Income People in Washington; and Brian K. Bruen and Joshua M. Wiener, Recent Changes in Health Policy for Low-Income People in Wisconsin. A companion paper by John Holahan, Joshua M. Wiener, and Amy Westpfahl Lutzky, "Health Policy for Low-Income People: State Responses to New Challenges," will be available as a web exclusive on the Health Affairs web site, http://www.healthaffairs.org, in May/June 2002.
This report is available in its entirety in the Portable Document Format (PDF), which many find convenient when printing.