FOREST - Read just about any major newspaper in just about any other state and within a couple of days you'll run across a story about how lawmakers there are scratching their heads to find money to cover skyrocketing Medicaid costs.
In Mississippi, the current Medicaid deficit is $268 million over the $419.3 million budgeted for this fiscal year. This number does not include what it will cost to reinstate the Poverty Level Aged and Disabled benefits cut during last year's session and then reinstated by U.S. District Judge Henry Wingate after a public outcry led to a federal lawsuit.
That brings Medicaid's 2006 budgetary request to $609.3 million, of which 44 percent is the overrun. That is a 65 percent increase in appropriations from this year to next, and again, that does not include the money it will take to cover PLAD.
All of this comes as Gov. Haley Barbour continues his no-new-taxes stance. That declaration flies in the face of a recent survey conducted by the John C. Stennis Institute of Government at Mississippi State University that shows 63.5 percent of people support a $1-per-pack tax increase on cigarettes. Support increases to 74.6 percent when asked if they supported the tax to help pay for the Medicaid budget. When tying the tax directly to health care programs, support jumps to 80.4 percent.
Mississippi is not the only state considering a cigarette tax. In New Hampshire, Gov.-elect John Lynch is seeking a 15-cent-per-pack increase to raise $22 million to be used for shortfalls in Medicaid and education budgets there. At 52 cents per pack, New Hampshire has the lowest cigarette tax of any New England state.
By comparison, Mississippi has the third-lowest cigarette tax in the nation at 18 cents per pack. The national average, according to the Mississippi Health Advocacy Program, is 84 cents per pack.
Complicating states' efforts to control Medicaid spending is the Bush administration, which has signaled they will seek to divert more cost to the states by cutting matching federal money for certain programs. Critics say President Bush's decision for this course of action is an effort to pay for making his tax cuts permanent.
Still, some states have squeezed a few million more out of the federal government. In Pennsylvania, Gov. Ed Rendell and U.S. Sen. Arlen Specter obtained $1.12 billion over four years that will be used for nursing homes that care for indigent patients.
In Illinois, Gov. Rod Blagojevich won approval from the federal government for a one-year tax increase on hospitals in the amount of $560 million. That money will be used by the state toward Medicaid in order to procure more federal matching dollars. Hospitals and health care groups in Illinois opposed the idea for 10 years before skyrocketing costs made them change their minds. Blagojevich and the health care community believe they will see increased Medicaid reimbursements that will exceed any additional taxes they pay out.
Lawmakers in Connecticut are facing a budget shortfall of between $600 million and $1.2 billion after appropriating $400 million in one-time money last year. Their Medicaid budget is the highest expenditure in the state, eclipsing education spending by $25 million. They, too, are considering tax increases, budget cuts and any unforeseen miracles.
Governors from across the nation met recently in Boston where they discussed, among other things, Medicaid spending. The National Governors Association said Medicaid costs states and the federal government $300 billion a year. Nationwide, the NGA said, Medicaid growth has outpaced revenue and now stands as the largest average expenditure for a state, surpassing even education.
If the Bush administration goes forward with its plan to cut federal money to the states, it compounds the problem. Cuts won't be enough. They might not be enough right now. But then again, taxes alone will not save this sinking ship.
