Beshear warns of job cuts, benefit losses without congressional action

06/07/2010 05:46 PM

Gov. Steve Beshear fired off a two-page letters to Kentucky’s congressional delegation Monday afternoon urging them to support passage of a six-month extension of a boost in the federal Medicaid program match that is key to balance the state’s budget.

He said Congress’s failure to act to extend the extra funding would create a $238 million hole in the newly-passed state spending plan the legislature approved in a special session last month.

“The House and Senate of the Kentucky General Assembly came together and offered a plan that counts on a six-month extension of” the federal match rate of Medicaid, Beshear’s letter said. “Without this extension … all their work will be moot and Kentucky will not be able to provide essential services to its citizens, resulting in a loss of jobs and a loss of support to the neediest Kentuckians.” Click here to read the letter.

The Medicaid program, which covers health costs for Kentucky’s poor and disabled, is one of the biggest budget items for Kentucky and other states. The federal government matches the state’s funding for the program. In Kentucky it’s normally about 70 cents for every 30 cents the state puts in.

As part of the 2009 federal stimulus bill, Congress included an extra $87 billion to increase that matching money to states through Dec. 31, 2010. A $24 million extension from Jan. 1, 2011 through June 30, 2011 was proposed but the Democratic-controlled House dropped it from a spending bill late last month.

McConnell spoke with Beshear Monday about the issue and told him it could come before the Senate as early as this week, said McConnell’s spokesman Robert Steurer.

“The senator reiterated his concerns about adding to our country’s unsustainable and growing debt, and the governor reminded the senator that this provision was not included in his requested (state) budget to the General Assembly,” Steurer said.

“Kentucky will not need this enhanced Medicaid match rate forever,” Beshear wrote in the letter addressed to Kentucky’s senior senator, Senate Republican Leader Mitch McConnell. “Today, however, in order to allocate resources to effectively operate state government, an extension … is essential.”

Because of the way the federal government matches Medicaid, losing $238 million just from Medicaid would mean “almost $1 billion in expenditures would need to be cut, impacting patients, doctors, hospitals and hundreds of thousands of Kentuckians who depend on this program.”

Last week, the National Conference of State Legislatures issued a similar plea addressed to McConnell and Democratic Senate Leader Harry Reid.

- Ryan Alessi


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