Medicaid Cuts Looming In Beebe Budget

On Thursday, Gov. Mike Beebe's balanced budget will be proposed, but state lawmakers received a sneak preview of one of the most problematic trouble spots on Tuesday.

State Medicaid officials discussed the Department of Human Services budget in an all-day hearing that eventually highlighted requests for new funding, cuts to key programs and worries that additional reforms may still leave a financial gap.

Beebe said two weeks ago that he had instructed DHS officials to review programs for potential cuts, but not elimination. He also said that he would be proposing additional general revenue of $90 million for Medicaid as well as $70 million in one-time budget surplus funding to help close a potential deficit that still ranges in the hundreds of millions of dollars.

DHS Director John Selig told legislators that some of the key cuts to programs in the Governor's budget recommendation will include:

• Skipping inflationary increases in Medicaid reimbursements
• Eliminating Level 3 care at nursing homes
• Eliminating Medicaid coverage for adult dental services
• Eliminating ARHealthNetworks, which provides coverage for about 20,000 low-income adults with full-time jobs
• Limiting coverage for adults in home- and community-based care to the current participants
• A variety of program changes aimed at efficiency savings

Rob Moritz with our content partner, the Arkansas News Bureau, reports:

State Department of Human Services Director John Selig told legislators the shortfall is largely the result of a decrease in the federal matching rate for Medicaid funding, prompted by economic growth in the state. He said the cuts the Governor proposes are regrettable but necessary in the absence of other revenue sources.

“We hate the idea of cutting. The reductions … are not things we want do,” Selig said.

The impact of the cuts may be lessened, however, if the state pursues an option under the federal Affordable Care Act that would expand Medicaid coverage mostly at the federal government’s expense, Selig said.

You can read more at this link.

The Governor has advocated for expansion of the state's Medicaid program under a provision of the federal health care law.  State estimates suggest the state could save $372 million over a 7-year period by expanding its Medicaid program.  Republican legislators have expressed reservations about the program's expansion.