February 10, 2005
CHIP cuts cost us all

I've harped on the drastic cuts in CHIP funds from the 2003 legislative session many times. It was bad policy in many ways, and helped contribute to the deserving defeats of Arlene Wohlgemuth and Talmadge Heflin at the polls, but even I didn't realize it was this bad.

State health care budget cuts in 2003 cost the state economy as much as$16 billion in lost productivity, stunted employment growth by about 70,000 jobs and shifted at least $1.5 billion in costs to local taxpayers, according to separate economic impact studies released Tuesday.


Major cuts were made in state services in 2003 as lawmakers tried to balance a budget with a $10 billion deficit without raising taxes. This year state revenues are about adequate to maintain current services, but pressure is growing to restore almost $1 billion in health care cuts made two years ago while also recognizing the potential for growth in the client population.

The budget cut about 250,000 low-income children from the Children's Health Insurance Program and 365,000 more from health care coverage through Medicaid for the poor.

The Mental Health Association in Texas and the Texas Hospital Association released separate studies showing the Texas economy has suffered from the 2003 health care funding cuts.

The hospital association study, which focused on state health care funding that impacts hospitals, found the cuts cost the state economy about $8.4 billion in the past two years and dramatically stunted job growth.

"Hospitals across the state have seen an increase in emergency-room visits because the ER has become the only way many uninsured people can access health care," said Dr. Dan Stultz, chairman of the Texas Hospital Association board of trustees. "In those communities with hospital districts, local taxpayers have seen tax increases to compensate for losses in Medicaid and CHIP funding and increases in charity care."

Economist Ray Perryman, author of the hospital association study, said the state budget cuts cost Texas $1.4 billion in lost federal matching funds.

He said additional strains put on the state's health care system also drove up premiums for employers who provide health insurance for their workers.

"Thus, the actual effects were to reduce federal health care funding in the state and shift the burden to providers, local taxpayers and companies offering insurance to their employees," Perryman said.

Do we have enough reasons to vote against Rick Perry yet? Sure is a good thing he got that $300 million for that "economic development" fund. Chris Bell is facing a target-rich environment, that's for certain. The Statesman takes a whack at Perry as well.

That story comes out on the heels of this one, which shows the effects of bad luck with one's health on middle class families. Will we finally get a serious discussion of health care insurance some day?

Posted by Charles Kuffner on February 10, 2005 to Budget ballyhoo | TrackBack

When the Republicans cut children out of the state budget two years ago rather than face the more difficult choice of raising taxes, they bragged that no one would remember or care. They would not pay a political price, they predicted.

Wrong. Arlene Wohlgemuth, the mean-spirited author of the main budget-cutting bill (H.B. 2292), was trounced in her congressional election against Democrat Chet Edwards in a district tailor-made for her. Talmadge Heflin, as you point out, went down to defeat at the hands of a rookie candidate. David Leibowitz of San Antonio beat Ken Mercer, a chief cheerleader for the kids' cuts. Mark Strama of Austin beat Jack Stick, one of the Republican House leadership's top lieutenants.

I predict that the fallout will continue in next year's elections. You see? There are consequences when one side overreaches and balances the budget on the backs of our kids.

Posted by: Gus Rinaldini on February 10, 2005 7:51 AM

As the feds try to figure out how to shift more of the Medicaid burden to states, and states grapple with larger and larger Medicaid slices of their budget pies, things are going to get pretty ugly.

Posted by: hope on February 10, 2005 10:14 AM