Most states have recovered, or are recovering from, the economic difficulties they experienced earlier in the decade, but some coverage programs have been severely cut. Even in states where reductions have been modest, there is a heightened awareness that health care cost inflation exceeds state revenue growth, and that strategies to stretch limited state dollars are essential to preserving benefits. In a series of four reports, Silow-Carroll and Alteras teamed up to identify innovative ways of financing health care with limited means.⁽⁶⁾ The strategies they describe include building on employer-based coverage through programs that offer premium assistance; targeted care management; pooled and evidence-based pharmaceutical purchasing; and strategic uses of uncompensated care funds. The reports encourage policymakers to learn more about these innovations and how they might be replicated or adapted in their own state.

In addition to promoting successful models and potential new opportunities, the State Innovations program seeks to draw insights from recent history. In a study on the effects of Medicaid cuts, a team of researchers led by sociologist Bill Wright, Ph.D., examined the impact that Oregon's Medicaid benefit cuts have had on low-income enrollees.⁽⁷⁾ Not surprisingly, many individuals lost coverage due to the higher costs, and many experienced a decline in health status. However, the analysis suggests that these negative impacts may be reduced considerably if coverage is restored within six months—a finding other states may want to consider as budgets rebound.

With an increasing number of individuals excluded from employer-based health insurance, many Americans are turning to the individual insurance market. A study by Nancy Kane and Nancy Turnbull from the Harvard School of Public Health examined the impact of state regulation in making the individual market more accessible and affordable.⁽⁸⁾ After studying regulations in seven states, Kane and Turnbull found that stricter regulation can help people secure coverage. The researchers recommend reforms that require broadened access, short waiting periods, standardized benefits, and limited rate variation. Still, affordability remains a serious problem. The group market, they say, functions more effectively, with the individual market remaining a last-resort option for consumers.