For Immediate Release January 27, 2004	CONTACT: Kari Root 202.292.6721

State of the States: Declining Revenues, Rising Medicaid Costs Challenge State Coverage Efforts in 2003
Medicare Reform, Federal Aid, and Improved Economy Provide Hope for Future

WASHINGTON—For the third consecutive year, states struggled to maintain or expand health care coverage to low-income individuals in the wake of difficult budgetary times, greater demand for health insurance, and rising health care costs, according to a report released this week by The Robert Wood Johnson Foundation’s State Coverage Initiatives (SCI) program. The report, titled “State of the States: Cultivating Hope in Rough Terrain,” provides a comprehensive analysis of state health policy issues in 2003, with a focus on efforts to improve coverage.

“By keeping coverage on their agendas during a period of fiscal crisis and competing funding demands, the states have demonstrated their unfailing commitment to the health care needs of their citizens,” says W. David Helms, Ph.D., president and CEO of AcademyHealth, a Washington D.C.-based health research and policy center that serves as SCI’s national program office.

Unfortunately, in order to balance their budgets, many states were forced to reduce benefits, eligibility, or outreach for Medicaid or the State Children’s Health Insurance Program. In light of double-digit increases in private premiums, the states worked with employers and other players to develop public-private partnerships aimed at preserving coverage.

In November, Congress passed a bill to modernize Medicare and provide a prescription drug program for seniors. In addition, as the 2004 presidential candidates launched their campaigns, several of them put forth ambitious proposals geared toward achieving universal health care coverage—a marked contrast to the incremental approaches that have been favored over the past decade. “Both the Medicare legislation and the upcoming election will shape states’ health care agendas for years to come,” says SCI Program Director Alice Burton.

Despite the challenges they faced, several states—including California, Idaho, Maine, and Utah—legislated or implemented significant expansions in 2003. Many others continued to address their uninsured with the help of one-time financial assistance administered by the federal government in June and grants provided through SCI and the Health Resources and Services Administration’s State Planning Grant program.

By year’s end, the states appeared to be making some progress, with fewer of them reporting budget gaps at the beginning of fiscal year (FY) 2004 than in early FY2003. “For the first time in several years, the states are cautiously optimistic that their fiscal pictures have begun to brighten,” says Burton.

To learn more, attend the State of the States briefing at AcademyHealth’s National Health Policy Conference at the Renaissance Washington D.C., Hotel (999 Ninth Street, NW). The briefing will take place at 10:30 a.m. on January 29, 2004, immediately following Governor Huckabee’s (R-Ark.) presentation about critical issues for states. At the event, Alice Burton, SCI’s director, and Alan Weil, chair of SCI’s national advisory committee, will be available to answer questions about the report.

For a free copy of the report, visit statecoverage.net/pdf/stateofstates2004.pdf, or contact
Katie Whitehead at sci@academyhealth.org.

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