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March 18, 2008

Health care a prime target for states' cutbacks

Financially strapped states are looking to take away government health insurance and benefits from millions of Americans already struggling with a souring economy.

An Associated Press review of the budgets in all 50 states reveals that coverage would be eliminated for hundreds of thousands of poor children, disabled and the elderly. More than 10 million people would lose dental care, access to specialists, name-brand prescription drugs or other benefits. About 20 million could see their care jeopardized by further cuts to doctors' reimbursements.

Health care in California is a choice target as governors and legislators confront the worst deficits they have faced in a decade or more, but that is not their only target: They also are considering cuts in aid to schools and universities, shrinking state work forces and even releasing prisoners before their sentences are completed.

Safety-net programs for the elderly, disabled and out-of-work also could be cut, even as the demand for those services is on the rise.

Despite the dire conditions, only a few states are seriously considering general tax increases or even modest increases on the wealthy to close the gaps. Lawmakers say they fear such actions would only further stress the economy.

Instead of health insurance, states are looking to increase lottery ticket sales, promote Indian gambling or further raise taxes on cigarettes and alcohol. Those taxes disproportionately hit the pocketbooks of the same poor and working-class that would be hurt by the spending cuts, studies show.

Nearly two dozen states are grappling with deep cuts and tax proposals to close shortfalls totaling more than $34 billion. That includes California, where lawmakers have made emergency cuts and authorized billions in bond sales to halve a deficit once projected at $16 billion through June 2009. Another dozen states are bracing for falling revenue.

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Posted by healthinsurance at March 18, 2008 01:06 PM