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Budgetary Analysis – Relation to Budgetary Policies

Different budgetary decisions associated with the aspects of the health care policymaking can influence the industry and the community significantly, with references to the positive and negative consequences. From this point, the task of the government and state authorities to find the balance while making difficult budgetary decisions. Referring to the example of Medicaid as the entitlement and mandatory program which is funded by the federal government and by the states, it is important to note that any changes in the associated budget can provoke the changes in the other budgetary spheres because of the necessity to compensate the increased spendings. However, being rather flexible in controlling the budget of Medicaid and similar programs, the states can decided independently whether to increase funding or cut spendings. Thus, it is important to examine the possibilities and the potential for state governments to change the budget and to analyze the effects of the budgetary changes on the community.

The Process Followed in Relation to Budgetary Policies

Discussing the changes in the health care budget, it is necessary to refer to the example of such a mandatory program as Medicaid because it can be discussed as the counter-cyclical program. From this perspective, the changes in the program’s budget depend on the changes in the social and economic life of the country. Medicaid is developed to meet the medical needs of the low-income American population (Longest, 2010, p. 8-11). Focusing on the process associated with the budgetary policy, it is important to note that each state in the country can determine which groups of the population can be discussed as eligible in relation to the program. First, the states determine the criteria and principles of eligibility, and the next step is the discussion of the Medicaid budget with references to the idea that any economic downturn can lead to the increase number of the low-income population and to the increased spendings which should be provided according to the Medicaid norms (Rosenbaum, 2002, p. 635). At this stage, the state governments should decide what types of budgetary changes should be provided.

The budget policies process starts with determining the preliminary targets in the sphere according to which the instructions and plans are developed in the future. The planned expenditures or spendings are discussed with references to the committees’ decisions, and the requests of the government should be satisfied with references to the developed policies and principles. While legislative committees perform their functions and add to the budget discussion, the possible decisions are examined by the appropriations committees to provide the conclusion about the budget’s efficiency (Longest, 2010, p. 13-14). That is why, different committees, including the legislative ones, are assigned to evaluate the number of people becoming eligible to Medicaid, the percentage of the services expansion, and the percentage to which it is necessary to increase spendings.

The Effects of the Budgetary Changes on the Community

The necessity to expand the budget in relation to one definite program often results in the significant financial burden experienced by the states where the budgetary changes are necessary. If the state authorities focus on shifting the financial resources from one sphere or program to the mandatory one, the community can experience the obvious effects of such budgetary changes which can be both positive and negative (Salganicoff & An, 2008, p. 41). It is possible to analyze the role of the effects for the community only while paying attention to the concrete community and to its needs and the people’s expectations related to the budget distribution.

Thus, on the one hand, the necessary increase in Medicaid spendings provoked by the problematic social and economic situation in the country and in the state can be discussed as beneficial for low-income persons who need the high-quality medical care. Different critical situations can influence people significantly, and the support of the mandatory programs with references to the additional funding can be discussed as the only way to provide the necessary assistance within the community. More persons receive the opportunity to use the advantages of Medicaid because they become eligible to participate in the program (Green, Gee, & Conway, 2013, p. 121; Longest, 2010, p. 8-11). On the other hand, if the budget was reallocated with references to such resources as K-12 school funding, the community can be influenced negatively because of the situation of suffering from the lack of the inadequate budget in the sphere of education.

The Recommendations to Provide the Budgetary Decision

Such situations when economic declines and crises and major unexpected crises as Hurricane Katrina influence the income and the state of health within the community make the authorities provide the complicated decisions to cope with the situations successfully. The problem is in the fact that it is rather difficult to choose between the focus on deficit or on additional funding to support such programs as Medicaid. The increased number of persons eligible to participate in Medicaid leads to the increased spendings on the health coverage in the state which suffers from the unexpected economic and social problems. As a result, the state and local government’s costs can increase significantly (Longest, 2010). The increase in Medicaid costs and spendings can provoke the chain reaction in the sphere of health care.

To avoid the deficit in the budget sphere of the state, it is possible to concentrate on the significant cuts, but the problem is in the fact that cuts in funding such programs as Medicaid can lead to many negative consequences for the community because people need more support during the periods of crises. That is why, the priority for the state government’s policies is to focus on the people’s welfare. From this point, it is possible to recommend the realization of the necessary cuts in costs which cannot influence the community directly and to provide the important additional funding to the program which should supported. Any recommendations related to the prioritized budgetary decision can be discussed as effective and can be realized appropriately only in the concrete state, with references to the state’s general budget policy. Furthermore, it is important to pay attention to the role of the crisis and its level to affect the community’s welfare.

For instance, referring to the situation of the state’s economic crises, the local authorities can decide on cutting the program’s spending or providing the additional funding while depending on the proper budgetary analysis of the concrete situation in the certain state. The federal government authorities cannot focus on only one effective strategy to overcome the problem because the local authorities in states are responsible for planning their budget in relation to such programs as Medicaid according to the federal guidelines, but independently and with references to the necessary flexibility (Longest, 2010).

Concentration on the deficit can be discussed as the prioritized decision if the state cannot provide the additional resources to support the program because of any problems in designing and administering different social programs in the sphere or in the associated ones (Keepnews, 2012, p. 71). However, the additional funding can be discussed as the efficient strategy if the state government can guarantee the provision of the necessary benefits for all the categories of the population depending on the surplus or extra resources planned in the sphere’s budget.

The Political Climate in States

The political climate in the concrete state depends on the local authorities’ decisions to develop the annual budget in relation to the health care system of the state. Thus, the annual budget can demonstrate the state’s priorities in relation to choose the deficit or additional payment paths in order to regulate such problems as the unexpected increase of the participants in the Medicaid program (Brandon, 2012, p. 1360). For instance, the Health Care Cost Containment System (AHCCCS) works as Medicaid in Arizona, and its budget is planned and regulated with references to the federal guidelines, state authorities’ decisions, committees’ decisions, and with the focus on the competing interests within the industry.

While discussing the example of the state policies in Arizona, it is possible to note that the spendings on health services are high in the state, and they can be compared only with the spendings adopted in the sphere of education. A lot of spendings are associated with the development of Arizona’s variant of the Medicaid program. Thus, the variety of services and programs are proposed for low-income people to meet their needs in the basic medical care. The authorities responsible for the progress of AHCCCS are inclined to choose the specific scenario for making the difficult budget decisions and to pay attention to the possibilities to provide the additional or extra spendings in order to respond to the community’s needs (Longest, 2010). The state government supports the federal government’s initiatives and prepositions to focus on the additional payments and on the expansion programs to promote the public’s welfare in the state and in the country.


The budgetary analysis related to the state governments’ policies and approaches to making difficult decisions regarding the problem of redistributing the financial resources is necessary to analyze the local governments’ strategies and priorities. Thus, to cope with the unexpected crises which can influence the budget associated with the health care industry and necessary funding issues, state authorities choose to cut spendings in the definite sphere or to cut spendings in the other sphere and add to the program which needs the support immediately. The effectiveness of this or that approach depends on the overall strategy used by the state’s authorities in order to design and regulate the mandatory programs in association with the federal government’s funding. That is why, while referring to the examples of the followed approaches and used strategies in Arizona, it is possible to state that the local authorities are often inclined to focus on the additional funding and provide the extra spendings for the mandatory health care programs in order to respond to the community’s needs because of the necessity to promote the public’s welfare.


Brandon, W. (2012). Medicaid transformed: Why ACA opponents should keep expanded Medicaid. Journal of Health Care for the Poor and Underserved, 23(4), 1360-1382.

Green, D., Gee, R., & Conway, P. (2013). Medicare and Medicaid quality programs. Obstetrics & Gynecology, 121(4), 705-708.

Keepnews, D. (2012). Protecting and expanding Medicaid. Policy Politics Nursing Practice, 13(1), 71-72.

Longest, B. B. (2010). Health policymaking in the United States. USA: Health Administration Press.

Rosenbaum, S. (2002). Medicaid. The New England Journal of Medicine, 346(8), 635-640.

Salganicoff, A., & An, J. (2008). Making the most of Medicaid: Promoting the health of women and infants with preconception care. Women’s Health Issues, 18(6), 41–46.

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"Budgetary Analysis – Relation to Budgetary Policies." OctoStudy, 23 Mar. 2022, octostudy.com/budgetary-analysis-relation-to-budgetary-policies/.

1. OctoStudy. "Budgetary Analysis – Relation to Budgetary Policies." March 23, 2022. https://octostudy.com/budgetary-analysis-relation-to-budgetary-policies/.


OctoStudy. "Budgetary Analysis – Relation to Budgetary Policies." March 23, 2022. https://octostudy.com/budgetary-analysis-relation-to-budgetary-policies/.


OctoStudy. 2022. "Budgetary Analysis – Relation to Budgetary Policies." March 23, 2022. https://octostudy.com/budgetary-analysis-relation-to-budgetary-policies/.


OctoStudy. (2022) 'Budgetary Analysis – Relation to Budgetary Policies'. 23 March.

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