New York Gov. Spitzer Proposes Additional Health Program Cuts To Address Budget Shortfalls

New York Gov. Eliot Spitzer (D) on Sunday reduced revenue projections for fiscal year 2009 by $384 million and will look to make up state budget shortfalls with additional cuts to health programs, the New York Post reports (Lovett, New York Post, 2/11). In his $124.3 billion budget proposal released last month, Spitzer proposed $980 million in cuts to Medicaid and other health programs, in part by changing the way the state reimburses hospitals and other providers to emphasize preventive care and by changing the way the state purchases medications in bulk (Kaiser Daily Health Policy Report, 1/24). However, the impact of the subprime mortgage fallout and lower-than-expected revenue from capital gains on real estate transactions led Spitzer to revise the revenue forecast, according to the New York Times.

Spitzer has proposed:

• Reducing the increase in Medicaid reimbursement rates for hospitals, nursing homes and home-care organizations by 35% -- 10% more than previously proposed (New York Post, 2/11);
  
  
• Requiring health insurers to pay for some programs that the state had planned to fund, including vaccinations against cervical cancer and anti-obesity efforts (New York Times, 2/11);
  
  
• Encouraging beneficiaries in the Elderly Pharmaceutical Insurance Coverage program to use generic drugs to save an estimated $19 million (Madore, Long Island Newsday, 2/11); and
  
  
• Adding $50 million to the $140 million increase in the "covered lives assessment" on health insurance companies that was previously proposed (Odato, Albany Times Union, 2/11).
  

Spitzer's budget director, Laura Anglin, said that additional cuts could be proposed later in the year if needed.