Medicaid Forecast Improved

State officials ended the 2010 fiscal year June 30 with better-than-expected news about a projected crunch in the state's Medicaid budget. During the General Assembly's Fiscal Session earlier this year, leaders of the Arkansas Department of Human Services (DHS) told legislators that Medicaid spending faced a massive reduction, adding up to about $400 million over the next couple of years. However, with millions of dollars in unexpected revenue now available for Medicaid funding, that dire forecast has been revised.

Besides receiving $24 million in additional federal stimulus funding, the program will also get a boost from $16 million provided by the Arkansas Attorney General's office from a drug case settlement. Officials caution the state is still not out of the woods when it comes to Medicaid, but the supplemental funds, coupled with below-projected Medicaid expenses for fiscal 2010, will give the state more time to decide how best to curb shortfalls expected by fiscal 2013. Further help would also be available if Congress votes to extend an expansion of federal contributions to Medicaid that otherwise expire December 31. Though many are skeptical whether federal lawmakers will approve the measure, an extension would bring about $200 million extra into Arkansas, and it could help the state avoid major Medicaid changes in the future. While Arkansas did not factor the extra funding into its budget as did many other states, Governor Mike Beebe joined 47 other state governors in signing a letter asking Congress to approve the funding. Another cushion that could help weather a short-term Medicaid shortfall is Arkansas's Medicaid trust fund.

Even though the Medicaid budget has more breathing room than previously thought, it is widely agreed that something has to be done to slow growth in the program. "Long-term, we are going to have to deal with the issue. Our rate of growth is unsustainable," said State Representative Gregg Reep, D- Warren, chair of the House Public Health, Welfare and Labor Committee. Around 775,000 of the state's 2.8 million residents receive some type of Medicaid benefit over the course of a year. Currently a $3.7 billion program, Arkansas's Medicaid budget doubled between 2001 and 2009. DHS Director John Selig says the department is looking into potential cost-cutting measures that could be gradually implemented, including making a variety of billing and payment changes and paying nursing homes for their level of care instead of at a uniform rate. Because of special language added to the DHS budget legislation during the 2010 Fiscal Session, any reforms that affect Medicaid coverage in the state would have to be reviewed by a legislative committee. "Everyone working to find a solution to the Medicaid issue realizes thousands of Arkansas families depend greatly on the various services provided by the program. Gradual reform now could help avoid drastic revisions later, and any changes will be carefully considered," said Reep.



Share |
WWW.ARKANSASHOUSE.ORG
Copyright ©2010 State of Arkansas. All Rights Reserved.