• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
Kentucky Center for Economic Policy

Kentucky Center for Economic Policy

   

  • About Us
  • Press Room
  • Events
  • Job Opportunities
  • Donate

Research That Works for Kentucky

  • Topics
    • Budget & Tax
    • Criminal Justice
    • Economic Security
    • Education
    • Health Care
    • Jobs & The Economy
  • Types
    • News
    • Op-Ed
    • Research

   

  • About Us
  • Press Room
  • Events
  • Job Opportunities
  • Donate

Copyright © 2021 KyPolicy Privacy Policy Terms & Conditions Sitemap

Analysis

Manageable Medicaid “Shortfall” Was Created in Budget the Governor Originally Proposed

Dustin Pugel and Jason Bailey | September 5, 2018

Recent testimony by Cabinet for Health and Family Services (CHFS) officials about a Medicaid “shortfall” over the next two fiscal years (just 1.3 percent of the total budget) left out important details, including that it was largely created by the executive branch in their January budget proposal to the legislature, causing unnecessary alarm.

More than 80 percent of the shortfall – $254.7 million of $311.2 million – would not exist had the governor’s recommended budget and ultimately the enacted budget simply reflected the official agency Medicaid request, as shown in the graph below. If Medicaid was funded according to agency projections, that would have also leveraged substantial additional federal dollars that may have closed any remaining shortfall.

More On Budget & Tax: Governor’s Budget Increases Funding for Relief and Reinvestment

Although every state agency requests a certain budget amount based on their anticipated need, the governor’s recommended budget proposal is the official starting point that the General Assembly uses to enact a final budget. It has been common for the governor’s proposed budget, and the following enacted budgets, to provide less than Kentucky’s Medicaid agency requested. But none of the recent cases have resulted in substantial cuts in benefits and spending has ended up at or below enacted amounts. Medicaid expenditures are ultimately hard to predict because they depend on conditions in the economy and health service utilization not precisely known 1-2 years ahead of time, which is when the state budget is created.

In addition to failing to explain the context for the “shortfall,” CHFS testimony overstated its extent by ignoring additional resources that were appropriated in the budget to deal with some costs. The spreadsheet detailing the deficit includes costs related to the reimbursement increase for the dispensing of medications to Medicaid enrollees, an increase in the provider rate for the Supports for Community Living (SCL) waivers and the extra Traumatic Brain Injury waiver slots without also showing that $91.1 million in funds were enacted to offset those costs. Had the General Assembly appropriated what the agency requested, and had CHFS reported the extra funding for the programs mentioned above, the total shortfall presented last week would have been non-existent.

Yet even at $311 million, the “shortfall” constitutes a very small portion of overall Medicaid benefits funding, and is known well in advance of the end of the budget period. Especially only two months into the first year of a two-year budget, it does not warrant drastic action to correct.

 

Using this claim as an excuse to cut Medicaid through barriers to coverage in Kentucky’s 1115 waiver request, ending vital benefits such as vision, dental and prescription drugs, or potentially ending the Medicaid expansion wholesale – as the administration has threatened to do – is reckless and would have devastating long-term costs. Taking away Kentuckians’ health care because of the way Medicaid was budgeted and information reported to the General Assembly is wrongheaded and will harm many of the 1.4 million Kentuckians covered by Medicaid.

FacebookTweetLinkedInEmail

Primary Sidebar

Get KyPolicy news updates in your inbox

Sign Up

Sidebar

Perspectives

Kentucky Must Remove the Roadblocks to Unemployment Insurance — Our Most Important Economic Stabilizer

Many Kentuckians Face Hunger and Hardship This Thanksgiving. They Need Relief.

Kentucky Lives and Livelihoods Are on the Line with Supreme Court Challenge to ACA

Letter to Governor Beshear: Priorities for Use of Remaining Coronavirus Relief Fund Monies

Congress Can’t Go Home Without Passing a Strong Aid Package

Other Budget & Tax Items

Gov Budget analysis

Analysis

Governor’s Budget Increases Funding for Relief and Reinvestment

Money Harvest slot machine thumbnail 1

Analysis

Any Action on Proliferating Slot Machines Must Raise Artificially Low Tax Rate

budget preview cover image

Analysis

Defeating the Pandemic and Building a Robust Recovery: A Preview of the Budget of the Commonwealth

Ky. Policy

Footer

Research that works for Kentucky

433 Chestnut Street, Berea, KY 40403

Phone: 859-756-4605

General information and inquiries: info@kypolicy.org

   

Help us make the facts free and accessible to everyone. That’s how Kentucky will thrive.

Donate

  • Topics
    • Budget & Tax
    • Criminal Justice
    • Economic Security
    • Education
    • Health Care
    • Jobs & The Economy
  • Work
    • News
    • Op-Ed
    • Research
  • About Us
  • Press Room
  • Contact

Get KyPolicy news updates in your inbox

Sign Up

Copyright © 2021 KyPolicy Privacy Policy Terms & Conditions Sitemap

made by P&P
Share this ArticleLike this article? Email it to a friend!

Email sent!
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you consent to the use of cookies.OkPrivacy policy