NCSLnet: State Budget Update--Appendix B--Medicaid

State Budget Update

Appendix B: State Actions Affecting Medicaid

May 1996

Overview
Appendix A: State summaries of 1996 revenues and expenditures
Appendix C: Other actions

Summary of state actions affecting Medicaid in anticipation of federal Medicaid changes.

Alabama: In anticipation of federal policy changes, legislative committees heard testimony from agency heads who are monitoring congressional action. Testimony occurred during hearings on welfare and Medicaid reform--the two areas where state policymakers anticipate reduced federal grants to cause fiscal problems. The governor established a task force on welfare reform that includes representation at the local level. In addition, the state has adopted eight managed care districts (PHPs--Prepaid Health Plans) to hold down Medicaid program costs. The Health Care Financing Administration gave preliminary approval of this plan, but has since challenged the operation. This controversy is still pending.

Alaska: Medicaid "reform" legislation is in process.

Arizona: There was no Medicaid-specific legislation this session. See Appendix C "Other Actions."

Arkansas: No regular session. No formal steps have been taken to prepare for federal budget changes.

California: No fundamental program reforms have taken place in the state's Medicaid program. The state is still uncertain on whether it will receive $216 million to cover services to illegal aliens.

Colorado: No formal steps have been taken to prepare for federal budget changes.

Connecticut: There have been no changes to the Medicaid program in anticipation of federal changes.

Delaware: Most of Delaware's changes to its Medicaid program preceded federal proposals. In anticipation of federal funding cutbacks in emergency assistance, the governor proposed an additional $12.2 million above the baseline in his FY 1997 budget request. The legislature has not yet acted on the budget.

District of Columbia: The district is moving toward managed care for its Medicaid caseload but not in response to any pending federal reform.

Florida: The Senate had a study commission that proposed sweeping changes to state welfare programs, including Medicaid, that are contingent on federal waivers.

Georgia: There have been no changes to the Medicaid program in anticipation of federal changes.

Idaho: The governor appointed a study commission to look at the state's Medicaid program during the interim.

Illinois: No formal steps have been taken to prepare for federal budget changes although there has been some discussion about establishing a task force over the summer to review the state's Medicaid program.

Indiana: House Enrolled Act 1219 would provide additional authority to the existing Joint Committee to Investigate Medicaid Reimbursement in the event "Medigrant" is enacted. It reviews proposed plans provided by the Office of Medicaid Policy and Planning, and reviews federal legislation in order to make recommendations to legislators.

Iowa: The legislature considered expanding the governor's authority to make up for any federal Medicaid cutbacks with state funds, but ultimately decided against such action.

Kansas: Kansas is pursuing managed care for its Medicaid caseload. The creation of a new legislative oversight committee is under discussion.

Kentucky: There were no Medicaid or other changes in response to anticipated federal actions.

Louisiana: Louisiana has amended its State Medicaid Plan by creating some pilot programs for managed care. Because of the phase-out of disproportionate share funds, a significant reduction in Medicaid spending is anticipated in FY 1997. State officials are seeking federal legislation to ease into the new Medicaid match rate to minimize the adverse effects on Medicaid funding in Louisiana, but they are not optimistic.

Maine: No changes were made in Medicaid or in other areas in response to anticipated federal changes.

Maryland: The state has expanded managed care to save approximately $19 million (0.8 percent). The level of savings may be optimistic because some managed care activities have already occurred. State officials expect Medicaid funding to be stable for FY 1996, FY 1997 and possibly FY 1998.

Massachusetts: No changes were made to the Medicaid program in response to anticipated federal changes.

Michigan: Michigan's FY 1997 budget assumes passage of the congressional Republicans' Medicaid reforms (most notably a new 60 percent matching rate). The assumption creates $330 million in savings for the state. If the assumed federal budget changes do not materialize, the state has a contingency appropriation plan for adjustments that will attempt to bring the budget into line. Determination of the need for such a contingency appropriation will be made by April 1, 1997. Additionally, welfare reform was passed assuming a savings of $100 million based on anticipated federal changes; if those changes do not take place, the state will have to determine how to close the $100 million gap.

Minnesota: No action.

Mississippi: The formation of a study commission to examine potential federal changes to Medicaid is under discussion.

Missouri: The governor created and will appoint members to a federal fiscal policy impact commission. Detailed base budget reviews of federal funding for departments of social services and mental health were conducted jointly by legislative appropriations staff and the governor's budget office. Managed care is expanding for Medicaid in accordance with the state's multi-year plan.

Montana: No regular session in 1996. However, the finance committee is monitoring federal activity and working on state changes, including mental health managed care implementation. To date, there have been no changes to the Medicaid program.

Nebraska: The Nebraska Legislature enacted LB1044, which restructures five agencies into three new agencies along functional lines. The objective is fundamental change in the way business is conducted by the state's health and human services system. The transition for affected agencies begins Jan. 1, 1997.

Nevada: No regular session. However, a permanent interim legislative committee has been in existence for a number of years; it tracks changes in Medicaid for educational purposes only. The governor previously suspended disproportionate share payments to local public hospitals.

New Hampshire: There have been no changes to the Medicaid program in anticipation of federal changes.

New Jersey: State changes to the Medicaid program have not been in response to federal actions. The state-run HMO for Medicaid was sold to the private sector and is expected to raise between $15 million and $20 million.

New Mexico: Because of the uncertainty of "Medigrants," Medicaid has been held to previous levels; income support programs have been expanded.

New York: Proposals to change the state's Medicaid program are taking place now. The delay in passing a budget for FY 1997 is partly a result of the disagreement over the governor's plan to shave $2 billion from Medicaid and other welfare programs.

North Carolina: There have been no changes to the Medicaid program in anticipation of federal changes.

North Dakota: No regular session in 1996. However, legislation passed in the 1995 session outlines agency authority to cut programs or change priorities in the event of termination or recombination of federal funds. To date, there have been no changes to the Medicaid program, although the state's welfare system is being reviewed, as is long-term care. The interim committees' reports are due in late fall.

Ohio: The state created a Human Services Budget Stabilization Fund in the amount of $100 million to address possible federal budget changes.

Oklahoma: There have been no changes to the Medicaid program in anticipation of federal changes.

Oregon: No regular session in 1996.

Pennsylvania: The Senate and House passed a plan that would save the state $250 million by removing adults without children from the state's Medically Needy Only program. It is an optional program that would not require a federal waiver. The savings are in anticipation of federal cuts to the Medicaid program.

Rhode Island: In anticipation of federal changes to Medicaid, the legislature is starting to think about a course of action on an informal basis. Legislative staff are studying the issue internally.

South Carolina: The legislature along with the governor created an ad hoc committee to give the public a forum for discussing its views on changes to the Medicaid program.

South Dakota: There have been no changes to the Medicaid program in anticipation of federal changes.

Tennessee: Tennessee has not taken any official action in anticipation of federal policy changes.

Texas: No regular session in 1996.

Utah: There have been no changes to the Medicaid program in anticipation of federal changes.

Vermont: In anticipation of federal changes, Vermont will begin to limit Medicaid utilization in FY 1997. Program changes include eligibility requirements, premium changes and caps. Vermont is also moving forward with managed care programs for Medicaid clients.

Virgin Islands: There have been no changes to the Medicaid program in anticipation of federal changes.

Virginia: There have been no changes to the Medicaid program in anticipation of federal changes.

Washington: Washington has entered into a contract seeking alternatives to reduce state Medicaid expenditures. A legislative oversight group will monitor the work of the consulting firm.

West Virginia: No significant changes were made in Medicaid.

Wisconsin: There have been no changes to the Medicaid program in anticipation of federal changes.

Wyoming: There have been no changes to the Medicaid program in anticipation of federal changes.

Posted May 1996, reviewed December 2003.
Email statebudget-info@ncsl.org for more information.
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