November 08, 2024
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Health care costs expected to strain states

PORTLAND – The cost of health care for the elderly in Maine, New Hampshire and Vermont will continue to strain state budgets in the decades ahead, financial experts said Monday during a meeting of national state budget officers.

“All states are looking at the health care costs driving our budgets,” said Don Hill, commissioner of New Hampshire’s Department of Administrative Services. “With the federal government today, and the way they have regulated health care, we’re actually hoping they’ll give the states more flexibility to customize the Medicaid program to meet the needs of our citizens.”

In New Hampshire, state officials have told agencies to ready themselves for budget cuts to compensate for rampant health care costs. Gov. Craig Benson recently said the state’s budget deficit could reach $300 million in the next two years and that some agencies could expect budget cuts as deep as 15 percent.

In recent budget estimates in Maine and Vermont, however, both states saw surpluses for the fiscal year ending June 30 – $61 million and $27 million, respectively.

But speakers during the annual meeting of the National Association of State Budget Officers in Portland said such surpluses could be unexpectedly short-lived without federal efforts to pad states’ coffers.

“Right now, right here, we’re bankrupt. The U.S. government is bankrupt,” Laurence Kotlikoff, a Boston University professor of economics, told budget officers from 45 states, the Virgin Islands and District of Columbia.

“There are solutions to our problems, but I don’t think either the Republicans or Democrats have the maturity or political will to handle them,” he said.

The biggest hurdle facing the budget in Vermont is the state’s share of the Medicaid program, which officials have predicted will leave lawmakers with a $250 million budget deficit, said Robert Hofmann, finance and management commissioner.

“Undoubtedly the biggest fiscal challenge facing Vermont right now is the Medicaid program. Absent that, Vermont is in a terrific position,” Hofmann said.

He also said that deficit predictions for Medicaid are sobering reminders of the flip side to states’ reliance on federal handouts.

State officials in Vermont and New Hampshire have begun looking at Maine’s Dirigo Health program as a way to shoulder rising health care costs.

The program, which allows people to get health coverage through private insurers at rates subsidized by the state and participating employers, is purely voluntary. People were allowed to begin enrolling in the program this month.

“If that proves as successful as it appears to be, it’s going to help out the state a lot,” said Don Hill, commissioner of administrative services in Maine.


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