FRANKFORT– State officials said Wednesday that the Medicaid deficit has ballooned to $231.8 million, up from $183 million state officials had originally projected for the federal-state insurance program.
Cabinet for Health and Family Services Secretary Janie Miller told House and Senate budget committees Wednesday that the state’s portion of that deficit was approximately $69.5 million.
That $69.5 million deficit is not included in the current projected $456 million shortfall that the legislature is currently grappling with how to solve.
Beth Jurek, budget officer for the cabinet, said as the economy has softened over the past six months, the number of people turning to the insurance program for the poor and disabled has ballooned.
Previously about 1,000 people were added to the Medicaid rolls each month. Medicaid had based its budget on that projection.
Over the past several months, the average number of new recipients has increased to 3,000 a month and sometimes more. From November to December, the number of Medicaid recipients jumped by 6,000 people from 741,036 to 747,745.
Medicaid is approximately 21.5 percent of the the state’s total budget of $24.16 billion.
Miller noted that that nearly all federal stimulus packages currently debated in Congress have included an increase in the federal contribution to the Medicaid program. State’s pay approximately 30 percent of the program while the federal government pays 70 percent. Some of the proposals in Congress currently call for increasing the federal government’s portion as much as 8 percent.
If the federal stimulus package is passed, Miller said that the bump in federal funding would take care of the growing Medicaid deficit and no additional state money would be needed.
Miller’s comments came during two separate presentations to the House and Senate budget committees about cuts the Cabinet for Health and Family Services has already made to its budget and cuts it will make to resolve the $456 million shortfall. Gov. Steve Beshear has called for four percent cuts to most agencies as well as a 70 cent increase in the cigarette tax and other increases in tobacco taxes.
House and Senate budget committees will meet again Wednesday to hear how state agencies plan to make those cuts on top of additional cuts made earlier this year to make up for the shortfall.
Medicaid was one program that was not cut in part because of its growing deficit and because it delivered essential services, Miller said.
The Cabinet for Health and Family Services cut $29 million from its budget earlier this year. To make up the four percent cut Beshear is calling for, the cabinet had to cut an additional $18.6 million. The cabinet tried to save front-line positions such as social workers and those who process food stamp benefits. But that meant other general fund programs had to be cut, Miller said. Included in the cuts were funding for a poison control line, mobile health clinics and a program designed to connect people in rural counties with health services they need.
Another area saved from cuts was the Department for Mental Health and Mental Retardation because it faces additional financial problems outside of the current budget crunch.
Miller also updated both committees on the status of Oakwood, a Somerset facility for the mentally handicapped that lost its Medicaid funding in May because of continuing problems at the facility going back several years. The federal government was paying approximately $47 million of Oakwood’s total bill before May. Now, the state is picking up the entire $68 million tab to run the facility where approximately 200 people with disabilities live.
The state, in an effort to regain federal funding, split Oakwood into four different entities. In September, the Centers for Medicaid and Medicare Services visited the four facilities; three of which passed an initial inspection. But those three facilities did have problems that had to be corrected, Miller said Wednesday.
Federal inspectors returned to Oakwood last week to re-inspect one of the three facilities. Some of the problems had been fixed but inspectors found one additional deficiency, Miller said.
“These are fixable issues,” Miller said of the deficiencies federal inspectors found. The three other facilities will receive follow-up inspections over the next several months.The facility that did not pass its initial inspection will re-apply for certification, Miller said.
Some senators voiced concerns that the state was spending so much money at Oakwood while other key programs — including a program that gives stipends to grandparents raising their grandchildren — had to be cut.
Sen. Denise Harper Angel, D-Louisville, asked that the cabinet provide the Senate with information on how many people were eligible to be transferred from the facility and how many community-based providers were able to house those people.
“I get so many concerns about Oakwood and what’s happening there. It just seems like it’s a bottom-less pit,” Harper Angel said.
Sen. Julie Denton, R-Louisville, also asked that the cabinet provide information on how many people wanted to move from Oakwood and asked that the cabinet provide a break-down of how much money it would cost the state to house those patients in an institution verses in a community-based provider.
Miller said that the state is using its entire-year appropriation for Oakwood to make-up for the lost federal funding. Miller said they are currently trying to determine when the state will exhaust that appropriation and will need to find additional money to run Oakwood.
— Beth Musgrave