SCI Releases 2010 State of the States

The State Coverage Initiatives (SCI) released this year’s State of the States, “The State We’re In,” with the headline, “State Reforms a Bright Spot in 2009.” This may have been a surprising tag following a year of historic state budget deficits. The depth of the angst over the huge budget gaps at the state level last year cannot be overstated. Nevertheless, State of the States was able to point to several bright spots: significant expansion of public programs in states like Oregon, Colorado and Wisconsin; eligibility or outreach improvements in the Children’s Health Insurance Program (CHIP) in 23 states; and insurance market and delivery system reforms across multiple states.

Two major federal reforms were critical to states in 2009: the reauthorization of CHIP and the increase in the Federal Medical Assistance Percentages (FMAP) included in the Recovery Act. These reforms led to a 7.9 percent increase in federal spending in Medicaid, which enabled states to maintain eligibility for key programs despite a 6.3 percent decrease in state spending in state fiscal year 2009. The latest census data show the importance of this strategy: uninsurance rates held basically steady despite falling employer coverage because of an increase in public coverage rates.

The picture is certainly not entirely rosy in the area of Medicaid and CHIP. In state FY 2009, 33 states cut or froze provider payment rates; this increased to 39 states in state FY 2010. Twenty-nine states reported that the FMAP increase helped them avoid or restore eligibility cuts (maintenance of effort in the area of eligibility was required to receive the higher funding amount). The FMAP increase is scheduled to expire in middle of state FY 2010 (although the President’s new budget proposal extends it another six months).

These sobering statistics highlight the important role of federal assistance to states in 2009. The need for an ongoing, effective partnership is clear. As states attempt to move forward, they are looking to the federal government for leadership and needed financial support as they seek to cover more of the uninsured. As you will see in the State of the States report, they are also focusing on insurance market and delivery system reforms in an effort to increase quality and lower costs in the current system. Those tasks also require effective cooperation across all levels of government and with those in the private sector.