Missouri Budget Project E-News
By Cara | October 12, 2009
Missouri Budget Project E-News
Federal and State Policy Update
October 9, 2009
In this issue:
1. Federal health care reform takes a step forward – S Finance Committee finishes amendments
2. October 20, 2009 will be a national health action day. Watch for details!
3. McCaskill speaks out about health care reform; Nixon is silent on issue
4. State Revenue for first quarter of Fiscal Year 2010 points to growing fiscal problems in this year and the future
5. Good news! Kudos to Missouri for efficient administration of the Supplemental Nutrition Assistance Program (Food Stamps)
6. The Missouri Budget Project has moved!
1. Federal health care reform takes a step forward – S Finance Committee finishes amendments
The Senate Finance Committee finished mark-up of its health care reform bill, the America’s Healthy Future Act of 2009 on October 2. The Congressional Budget Office “scored” the bill, announcing on October 8 that it will save an estimated $81 billion over 10 years, and will cost an estimated $829 billion. A final vote by the Committee….
Affordability: Amendments were added to make the S Finance proposal more affordable, but more work is needed in this area. The cost of premiums and out of pocket costs are still too high for low income families and some moderate income families.
A public option: the Senate Finance proposal does not include a public option. The option of a public insurance program is likely to be helpful in driving down insurance costs. However, the proposal does include an amendment that would allow states to negotiate for coverage on behalf of low income enrollees instead of having them buy coverage through an Exchange. It is presumed that states that do this (Washington and Massachusetts now do similar things) would contract for rates that are higher than Medicaid, but lower than private insurance. Another idea that is not in the proposal, but which may have traction as bills move forward, is giving states the flexibility to create a public option or to open the state employee program to the Exchange population. The Finance proposal does include the concept of co-ops.
Insurance market reform: the Senate Finance proposal allows insurance companies greater leeway than other proposals to charge higher rates based on age, geography, family size and tobacco use.
Legal immigrants: amendments that could have discriminated against legal immigrants were defeated. Insurance for undocumented workers is not included in any of the House or Senate proposals.
Financing: the Senate Finance proposal came in at a cost considerably lower than the benchmark, which is a cost of $900 billion over 10 years. (The result of the lower cost plays out in insurance being less affordable). All proposals finance reform with a mix of cost savings from within the system, and targeted new taxes. The financing mechanisms in the Senate Finance proposal are more complicated than those in the House, and have the potential to affect individuals at lower incomes than the House proposal. The House proposal would only affect individuals with incomes over $280,000 and couples with incomes over $350,000.
Children’s Health Insurance Program: CHIP will be extended in its current from until 2019. States will be required to maintain eligibility at least at current levels, but would get increased federal matching funds beginning in 2014.
2. October 20 will be a national health action day
Watch for details next week about how you can make a difference!
3. McCaskill speaks out about health care reform; Nixon is silent on issue
Senator McCaskill joined 6 other Democratic Senators and one Independent in sending a letter to Senate leader Harry Reid. The letter is apparently in response to outcries at town hall meetings this summer that greater transparency is needed about proposed reform (and that both the public and elected officials must actually read the proposed bills prior to votes on them!).
The letter asked that the complete legislative text and the Congressional Budget Office’s score of the proposals be posted on a public web site 72 hours in advance of any vote to move forward with health care reform in the Senate. The letter goes on to request posting of amendments prior to debate, and a posting of the final bill, with CBO score, 72 hours prior to the final Senate vote on the Senate proposal, as well as the final Senate vote on the bill that comes out of the Conference Committee.
Meanwhile Governor Jay Nixon declined to join 22 of 28 Democratic Governors in signing a letter to House and Senate leadership in support of federal health care reform. The letter does not take a position on controversial issues (such as a public option), but says that states “will only achieve the health care security and stability they need if we succeed in working together with Congress and the President to achieve health care reform…the status quo is no longer an option.”
The Missouri Budget Project agrees that the status quo is not an option. Premium costs are rising 4 times as fast as wages in Missouri. A report just released by Families USA estimates that based on unemployment rates in Missouri in 2009, 65,000 Missourians have lost their health insurance since the beginning of the year. Census data showed that 734,000 Missourians were uninsured in 2008.
3. State Revenue for the first quarter of FY2010 points to growing fiscal problems in this year and the future
The first quarter of the fiscal year (July through September 2009) ended with a 10 percent decline in revenue compared with the same period last year.
The Missouri Budget Project estimates assume that if growth at least stabilizes during the rest of the fiscal year, the state will end the year at a negative 2.5 percent. The FY2010 budget was based on growth of 1 percent. The Office of Administration estimates that revenues will be about $400 million below the estimate on which the budget was based.
Assuming that the state returns to more “normal” growth of 3.5 percent the following year (FY 2011), and that the remainder of the federal recovery funds for FY 2011 is used in FY2011, the FY 2011 budget will still be an estimated $489 million short.
FY 2012 (with no additional federal recovery funds) will have an estimated $1.5 billion shortfall.
Rumors are circulating about another round of budget cuts in FY2010. Word from the Division of Budget and Planning is that additional positions will be eliminated and additional reductions will be needed. Discussions about the details of these, and specific amounts of reductions for Departments are underway.
That’s the bad news. The good news is that many people are realizing that the state can’t continue on this trajectory, and that balanced solutions are needed that enhance revenue in additional to trimming the budget. The Missouri Budget Project will be releasing information about some options for this during the coming months.
4. Good news! Kudos to Missouri for efficient administration of the Supplemental Nutrition Assistance Program (Food Stamps)
The US Department of Agriculture gave cash awards to states for outstanding administration of the SNAP program. Missouri was one of 8 states recognized for reaching and enrolling eligible Missourians. Missouri received a $2.6 million award. It was also one of 6 states that received awards for timely processing applications. This was a $1.8 million award.
Data from the Department of Social Services’ monthly report show that in August 2009 slightly more than 1.1 million Missourians received SNAP benefits of $10.7 million. Average per person benefits per month were $97.54. The number of individuals receiving SNAP benefits increased 53.7 percent over August 2008. SNAP benefits go directly into Missouri’s economy, boosting it, as well as helping individuals purchase needed food items.
5. The Missouri Budget Project has moved!
OUR NEW ADDRESS IS CITY HOUSE, 3534 WASHINTON AVENUE, ST. LOUIS, MO 63103. Our phone number and email addresses remain the same.
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