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Facing Medicaid Budget Shortfall in 2006: State Context Influences Government Health Service Cut-Backs
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Facing Medicaid Budget Shortfalls in 2006: State Context Influences Government Health
Service Cut-Backs
Mary Schmeida, Ph. D.
Senior Researcher
Cleveland Clinic Foundation
## email not listed ##
Ramona McNeal, Ph.D.
Assistant Professor
University of Illinois at Springfield
## email not listed ##
Kathleen Hale, Ph.D.
Assistant Professor
Auburn University
## email not listed ##
Abstract:
Rising state Medicaid budget shortfalls present questions of state capacity in the context
of devolution. Despite aggressive cost-cutting initiatives, states may be constrained by tax policies that restrict their ability to meet changing economic and demographic conditions. We find that states with structural budget deficits increase the risk of Medicaid shortfalls when controlling for other factors. Lower corporate tax rates, flatter personal income tax structures, and temporary fiscal solutions contribute to the risk of Medicaid shortfalls, along with changing demographic changes in the states. State contextual factors that decrease the likelihood of state budgets in structural deficit include party competition and decreases in demographic need, whereas gubernatorial term limits increase the likelihood of state structural budget risk with respect to Medicaid. We argue that states must enhance capacity in order to implement Medicaid and other policy initiatives in the current climate of federalism.
Prepared for delivery at the 102
nd
Annual Meeting of the American Political Science
Association, Philadelphia, Pennsylvania, August 31-September 2, 2006
Copyright by the American Political Science Association
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| | Authors: Schmeida, Mary., McNeal, Ramona. and Hale, Kathleen. |
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Facing Medicaid Budget Shortfalls in 2006: State Context Influences Government Health
Service Cut-Backs
Mary Schmeida, Ph. D.
Senior Researcher
Cleveland Clinic Foundation
## email not listed ##
Ramona McNeal, Ph.D.
Assistant Professor
University of Illinois at Springfield
## email not listed ##
Kathleen Hale, Ph.D.
Assistant Professor
Auburn University
## email not listed ##
Abstract:
Rising state Medicaid budget shortfalls present questions of state capacity in the context
of devolution. Despite aggressive cost-cutting initiatives, states may be constrained by tax
policies that restrict their ability to meet changing economic and demographic conditions. We
find that states with structural budget deficits increase the risk of Medicaid shortfalls when
controlling for other factors. Lower corporate tax rates, flatter personal income tax structures,
and temporary fiscal solutions contribute to the risk of Medicaid shortfalls, along with changing
demographic changes in the states. State contextual factors that decrease the likelihood of state
budgets in structural deficit include party competition and decreases in demographic need,
whereas gubernatorial term limits increase the likelihood of state structural budget risk with
respect to Medicaid. We argue that states must enhance capacity in order to implement Medicaid
and other policy initiatives in the current climate of federalism.
Prepared for delivery at the 102
nd
Annual Meeting of the American Political Science
Association, Philadelphia, Pennsylvania, August 31-September 2, 2006
Copyright by the American Political Science Association
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