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The twin threats of recession and terrorism are now very real in the minds of legislators and they have arrived at nearly the same time. Both will put strains on funding public health care as states strive to protect not only the have-nots but now the haves.
States will be squeezed by lowered revenues and will be considering cutbacks in the coming months following the Sept. 11 terrorist attack on the World Trade Center in New York City and the Pentagon in Washington, DC. An entitlement such as Medicare will likely remain unchanged, but states will consider cutting back on programs and staff. States also will find themselves the facilitators of information and services between the federal government and municipalities and cities. Plans for combating bioterrorism are in place, but they must be staffed. It will all cost money, which now must flow from Washington, DC.
But both problems are new and just beginning to loom. No one is sure how extensive the problems will be or how drastic the steps to fight them will be. Public health will not be the only state expense; funding for armed marshals is one avenue many states are considering. The money must come from somewhere, and it’s not clear how deeply the federal government will become involved in mandating state and local requirements.
"It will be a challenging time as state revenues are likely to come in below expectations," Jocelyn Guyer, senior policy analyst with the Kaiser Commission on Medicaid and the Uninsured in Washington, DC, tells State Health Watch. "It’s important to look at the fact that states went into this year in relatively good fiscal shape. The silver lining is they have built up reserve funds in the late 1990s, so they can draw on that through this difficult period."
A recession leaves more people on the rolls of the uninsured, Ms. Guyer adds, and it’s happening at a time when there is a general resurgence in health care inflation.
"Sometimes, what happens during tough times is an effort to scapegoat programs and Medicaid is often scapegoated," Ms. Guyer adds. "When you look at different programs, all are experiencing the same problem."
Julie Hudman, Kaiser Commission associate director, tells State Health Watch that she doesn’t foresee any Medicaid cuts. "But CHIP [Children’s Health Insurance Program] is different. It’s a block grant."
Rising drug costs could play a significant role in the decision of where to make cuts at the state level, and that could lead directly to decisions made about Medicaid, says Robert Hurley, associate professor of the Department of Health Administration at Virginia Commonwealth University in Rich-mond. Plus, he adds, any plans to fight terrorism will bring new competition for dwindling resources. He suspects the antiterrorism battle will be paid for by a combination of state and federal money.
"The feds may have to finance it, and the states will be integral players in providing and delivering services," Mr. Hurley tells State Health Watch. "At the state level, it’s not clear there is a sea change. Soon we’ll see, after the first of the year. It’s easier to spend someone else’s money, and in this case, there is a strong case to be argued that life and liberty is what we have the federal government for. If they can’t do it, you won’t get it from localities."
The roots of state government stretch deeply into the fabric of everyday life, into places most people are not aware of. In Georgia, part of the state’s antiterrorism role is played by annually inspecting every X-ray machine in the state.
It has been the state’s responsibility for years, but the role is now magnified by concerns at Atlanta’s Hartsfield International Airport, one of the busiest in the world. For the moment, Marty Rotter, director of the office of regulatory services for the Georgia Department of Human Resources, tells State Health Watch that the state is not doing anything different with its inspections than it has in the past.
But many states are looking at their public health role differently in light of the events of Sept. 11. It was not unusual for a state to have a bioterrorism plan, but it was not business as usual to test its practicalities.
"Certain states looked at this prior to Sept. 11th. Now they need to get up to speed and make sure their departments of public health can handle it," Doug Farquhar, program director for environmental health at the National Council of State Legislators in Denver, tells State Health Watch. "The infrastructure is in place. Now they need to be prepared to address problems, able to shift priorities."
Money will be spent to make sure that previously made plans are practical, Mr. Farquhar says.
We need help making sure strategy is in place, so the state departments of health know where their place starts and ends," he adds. "States are in the middle, not the front line, and they are not the final source. They are intermediaries in many respects."
Mr. Farquhar predicts a revisitation of state laws regarding protections of populations against disease. For instance, he says, what happens if there is an outbreak of smallpox? Health departments cannot arbitrarily cordon off an area that might be infected. The state legislature has to make such decisions, he says, and carrying out those decisions will cost money that states may not have.
"Most state legislatures are not in session. Their budgets are killing them. They’re out of money, and they now have huge new initiatives," Mr. Farquhar says. "It’s not like the feds. States can’t create money."
The state of Indiana would love to create some money for its coffers. Instead, it must make do with what it has. "Indiana is broke. It has a $600 million deficit. There will be no raises. We will see programs cut back. There will be Draconian measures to balance the budget, and we are mandated to have a balanced budget," Margaret Joseph, director of Indiana’s office of public affairs, tells State Health Watch.
But Indiana began work on its bioterrorism project before the troubles set in. Labs are set to test for outbreaks, and specimens do not have to be sent out of state for analysis. The state’s e-mail network among local health departments is up and running. The funding for testing comes from the feds, she says, and the state funds the infrastructure.
Much of the funding comes through the Centers for Disease Control and Prevention in Atlanta.
One of the by-products of the Sept. 11 terrorist attacks in New York City was a decision by the U.S. Department of Health and Human Services (HHS) to provide expedited health coverage for low-income New York children and adults in the Medicaid, Child Health Plus, and Family Health Plus programs.
HHS secretary Tommy Thompson said that for four months, low-income New York applicants for the programs only would have to complete a simple, one-page application attesting to their financial and other relevant circumstances. The temporary procedure replaced the normal application requirements that call for more detailed information that is also confirmed by the state. A fuller application will be taken and approved after the four-month period. In addition, under the temporary change, current beneficiaries who were due to be recertified for the programs during the four-month period will continue to receive coverage for another year without recertification.