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States Respond to COVID-19: Budget Outlooks Amid the Pandemic

As the COVID-19 public health emergency continues to consume time and resources across the U.S, states are making unexpected budgetary decisions that could significantly affect health care.

Previous state revenue forecasts are no longer relevant because of the implications of the virus; in particular, Medicaid programs will face the brunt of many budgetary cuts. Examples of several states making budgetary changes that affect health care include:

As states see reductions in Medicaid funding, program enrollment is projected to rapidly increase. Health Management Associates, a leading independent national research and consulting firm in the health care industry, estimated that the unprecedented changes caused by COVID-19 could lead to increases in Medicaid enrollment. According to their estimates, enrollment could increase from 11 million to 23 million people across all states in the coming months based on factors, such as:

  • access to services for displaced workers and families;
  • operational capacity to enroll new members; and
  • congressional and administrative decisions related to COVID-19, such as curbing Medicaid disenrollment during the public health emergency.

N.Y. No Longer Allows Hospital Patients Discharged to Nursing Homes

On May 10, New York Gov. Andrew Cuomo (D) released an executive order stating hospitals are no longer allowed to discharge patients to nursing homes unless they test negative for COVID-19. Additionally, workers in nursing homes must be tested twice a week for the virus. The governor is requiring all nursing home administrators to submit a certificate of compliance and a plan to the state by Friday May 15.

Additional States to Receive Remdesivir

On May 9, the Department of Health and Human Services’ (HHS) Office of the Assistant Secretary for Preparedness and Response announced an allocation plan for the drug remdesivir, which is meant to treat hospitalized patients with severe cases of COVID-19. This antiviral drug has been shown in clinical trials to shorten the recovery time in some patients.

The allocation of this drug came from a donation from Gilead Sciences Inc. An initial allocation was sent to seven states at the beginning of last week:

  • Indiana: 38 cases;
  • Massachusetts: 117 cases;
  • New Jersey: 94 cases;
  • New York: 565 cases;
  • Rhode Island: 30 cases;
  • Tennessee: 7 cases; and
  • Virginia: 33 cases.

Each case contains 40 vials.

Beginning May 7, HHS initiated a process to distribute the drug to additional states, including:

  • Connecticut: 30 cases;
  • Illinois: 140 cases;
  • Iowa: 10 cases;
  • Maryland: 30 cases;
  • Michigan: 40 cases; and
  • New Jersey: 110 cases.

Moving forward, state officials will be responsible for the distribution of the drug. The administration is scheduled to speak with governors about this issue on May 11.

We encourage all members to visit the America’s Essential Hospitals coronavirus resource page for more information about the outbreak.

Contact Senior Director of Policy Erin O’Malley at or 202.585.0127 with questions.


About the Author

Abigail Painchaud is a policy associate at America's Essential Hospitals.

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