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Despite Deficits, States Avoid Cutting Medicaid, CHIP Rolls

Although states are straining to close budget deficits, they have refrained from introducing stringent eligibility requirements for the CHIP and Medicaid programs. An evaluation of 12 states by the Urban Institute found that many expanded their health insurance programs during the 1990s.

Now, they are freezing provider reimbursements, limiting outreach efforts, and eliminating some benefits in response to the weak economy. However, the states have, for the most part, not reduced eligibility for the programs.

That's not just a matter of delaying the inevitable. Even if fiscal pressures continue to mount, states will be hesitant to cut enrollment because that would mean losing matching federal dollars, the study says.

Financial pressures on the programs, however, are expected to continue. Those include higher provider payments, rising health care costs, and lower savings resulting from managed care.

Perhaps not unexpectedly, on June 4, the National Governors Association asked Congress for "short-term relief" in the form of a 1-percent increase in the federal Medicaid reimbursement. The prospects of such legislation passing in the near future are dim.

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