Kaiser Daily Health Policy Report Highlights Action in State Medicaid Programs

A summary of recent news on state Medicaid programs appears below.

• Kentucky: State health officials have developed a "list of potential steps" to address a $216 million budget deficit in the state's Medicaid program. Under one proposed solution, Kentucky would save more than $186 million this year by limiting the number of residents eligible for Medicaid and charging families a $20 monthly copayment for the Kentucky Children's Health Insurance Program, the state's Medicaid expansion CHIP program. Another solution is "phasing out" Medicaid coverage for beneficiaries in nursing homes and for those who receive some community-based health services. Neither Kentucky Gov. Paul Patton (D) nor his cabinet have approved the proposals (Richardson, Lexington Herald-Leader, 2/20).
• Maine: Gov. Angus King (I) is expected to "reinstate" a number of health care services -- including part of a scheduled Medicaid reduction -- that faced "significant reductions" under his supplemental budget for the current two-year cycle, in light of new budget estimates released Feb. 21. In the new analysis, the Maine Revenue Forecasting Committee said the state would face a $160 million budget deficit in fiscal year 2003 -- compared with a $248 million shortfall projected last November -- because of $91 million in additional estimated revenue. In response, King said that he would likely reinstate about $25 million in Medicaid reductions. He added that payment reductions to health care providers, such as doctors, nursing homes, hospitals and facilities for the mentally retarded, will "lead the restoration list" (Higgins, Bangor Daily News, 2/22).
• Mississippi: Under a "compromise bailout" bill (HB 1200) passed in the state Legislature on Feb. 22, the state would charge additional copayments to some Medicaid beneficiaries and reduce reimbursement rates for providers to help address a $158 million budget deficit in the state's Medicaid program for the fiscal year that ends June 30 (Elliot, AP/Memphis Commercial Appeal, 2/23). The bill would require Medicaid beneficiaries to pay $3 per prescription, up from $1, and would reduce the number of prescriptions covered from 10 per month to seven per month. In addition, the legislation calls for a 5% reduction in reimbursement rates to doctors and hospitals that treat Medicaid beneficiaries. Nursing homes would not face the 5% reduction under the legislation but rather would pay the state a fee of $3 per bed, up from $2 per bed, which would give the state an additional $6.7 million in savings (Elliot, AP/Memphis Commercial Appeal, 2/22). The bill also "dips into" the state's tobacco trust fund this year and next year to cover Medicaid costs. Even with the increased fees and use of tobacco settlement funds, the state still would face a $17 million Medicaid budget deficit, state Rep. Bobby Moody (D) said. Gov Ronnie Musgrove (D) has not decided whether he will sign the legislation into law (Elliot, AP/Memphis Commercial Appeal, 2/23).
• Nebraska: A state legislative committee on Feb. 20 voted against a bill (LB 1095) supported by Gov. Mike Johanns (R) that would have increased the number of times from once to twice per year that officials review the eligibility of children enrolled in the state's Medicaid program. Increasing the number of reviews was expected to save the state about $3.7 million per year "by catching more quickly those children receiving benefits who were no longer eligible" (Bauer, AP/Lincoln Journal Star, 2/21).