Special legislative session to tackle shortfall in Medicaid

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When the General Assembly began the 2011 Regular Session in January, there was only one thing that had to be done: Plug a sizeable deficit in Medicaid.
Work on doing just that began in November, when Gov. Steve Beshear offered a plan that would keep the solution within that healthcare program.
In essence, it calls for using money set aside for next year to cover the short-term problem, then implementing a wide array of cost-saving managed-care programs across the state similar to those that have long been used for Medicaid recipients in the Louisville area.
That would give us enough time to smooth out the deficit, and do it without cutting programs or raising taxes.
About a month ago, the House overwhelmingly voted to take this approach. The state Senate, however, chose a different tactic when it unveiled its plans just four days before the legislative session was effectively scheduled to end.
The Senate plan called for across-the-board cuts, including more than $30 million to be taken directly out of the classroom. Universities would have lost $22 million more.
A letter from Kentucky Chief Justice John Minton said this cut, when added to eight others made over the last several years, “would mean a staggering 28.5 percent reduction of the Judicial Branch budget since Fiscal Year 2009.”
Public defenders and prosecutors alike would have been hit hard as well. The first group would have seen a loss of more than 40 people, putting case loads at about 500 per attorney. The second group, meanwhile, would have been forced to resort to layoffs or rely on furloughs even more to cut costs.
The issue arose late last year, when Congress did not appropriate as much stimulus money for the healthcare program as Kentucky – and more than two dozen other states – expected.
Medicaid is a unique partnership between state and federal governments, in which the state provides about 25 cents of every dollar spent. But to get that federal match, we must put our portion up first.
The reduction in stimulus money, then, is dramatically magnified when you factor in the reduced federal match. The deficit is more than a half-billion dollars.
Because Kentucky must balance its budget each year, unlike the federal government, we have to close that hole before June 30. Gov. Beshear says healthcare providers will see their payments reduced by 30 percent over the next three months if this issue is not resolved. That would undoubtedly close many of these companies’ doors and, potentially, could disrupt the system for years.
With that in mind, Gov. Beshear called for a special session that began Monday. The House would have preferred using the one legislative session day we had reserved on March 21 for vetoes, but the Senate precluded that possibility when it met this past Wednesday without the House. That means we have no opportunity to reconsider any of the bills sent to the governor over the last month that he might veto.
For now, the House – and those in the state Senate who supported the governor’s approach – will see if we can work out a compromise in as short a time as possible.
Beshear’s goal, like mine, is to avoid any cuts, especially to education.
Although this issue will understandably dominate our time, Gov. Beshear did add another issue to consider during the special session: Raising the high school dropout age from 16 to 18.
The House has supported this several times in the past, including the just-concluded legislative session.
It’s time to change a rule that was put in place nearly a century ago.

Rick Rand, D-Bedford, represents the 47th House District in the Kentucky General Assembly. He may be reached by writing to Room 351C, Capitol Annex, 702 Capitol Avenue, Frankfort, KY 40601, or leave a message at (800) 372-7181 – TTY (800) 896-0305.