Beshear unsure of how a $83 million Medicaid gap will impact the state budget

08/11/2010 11:28 AM

A day after the U.S. House approved $26.1 billion in aid to states for programs such as Medicaid, Gov. Steve Beshear is still unsure how to cover a budget gap created when he and lawmakers assumed the federal government would send more money.

The state originally budgeted for $238 million in help, but will receive $155 million thanks to the bill approved by the U.S. House Tuesday. That leaves a $83 million gap that Beshear must fill. Where that money will come from is still unknown, Beshear spokeswoman Kerri Richardson said in a statement. Here’s what she said:

“The administration is pleased that Congress passed this critical funding for the states, and hopes that the President quickly signs it. Approximately 30 states passed budgets assuming Congress would extend the enhanced Medicaid matching rate. Unfortunately, less money is provided through the bill for Medicaid than our General Assembly counted on. However, because the Senate combined both Medicaid and education legislation in this measure, it is it is unclear at this point exactly how the money will impact the overall state budget. We will be analyzing the restrictions and allowable uses of the funding as more information becomes available.”

And while the shortfall from the federal government is $83 million, the total size of the budget hole could be larger because the system is currently set up in which the federal government matches the money state governments put into the Medicaid program, which covers health care costs for the poor and disabled. In Kentucky, the state usually receives about 70 cents from the federal government for every 30 cents it supplies.

In a June letter sent from Beshear to U.S. Senate Minority Leader Mitch McConnell, Beshear said that without the funding match Kentucky would “lose jobs” and have to cut services to the “neediest Kentuckians.”

The Medicaid program is one of the largest budgetary items for Kentucky. According to the Courier-Journal, the state could lose an additional $200 million in matching funds if they don’t plug the $83 million gap. Finding that extra money may require the legislature to re-open the two-year budget they passed in May, state Rep. Jimmie Lee, Democrat from Elizabethtown, told the paper.

UPDATED 5:44 p.m.: Phil Moffett, the Louisville businessman who has announced he is running for the Republican nomination for governor next year, issued a statement criticizing Beshear for even being willing to accept the $155 million. He said it will come with “strings attached” to the federal government. But Moffett didn’t offer a suggestion about how to cover the rising costs of the Medicaid program.

“Gov. Steve Beshear clearly has no idea what he is doing. He is so desperate to get federal money he is not at all concerned about the strings attached that will cost Kentuckians significantly more in just the next few years. Kentucky should reject this $155 million and go back to cutting spending. It’s just not that complicated.”

- Kenny Colston


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