A Senate committee rejected a proposal Tuesday from Gov. Steve Beshear that would have balanced the state’s Medicaid budget by using money now that had been intended to cover next year’s costs in the state’s Medicaid program.
The Senate Appropriations and Revenue Committee revamped Beshear’s proposal so that a shortfall in the program of more than $160 million would be made up with across-the-board cuts to other government programs, including education. The Medicaid program provides medical care to some 800,000 of the state’s elderly, poor and disabled.
“People all over this state are making serious budget decisions in their own lives,” Senate President David Williams told the committee that accepted his proposal for cuts of 2.26 percent next fiscal year and smaller cuts through the remainder of the current fiscal year.
Beshear had called for a simple solution: shifting $166.5 million to cover this year’s costs. He said in a statement the Senate proposal would require “painful and unnecessary cuts” to an array of government services, including public schools and universities, public safety and job creation.
“These cuts are not necessary when a viable alternative is available,” the governor said.
Beshear’s plan also called for making up the $166.5 million next year by saving through privatization of some Medicaid services.
“ There has been absolutely no credible testimony at this juncture, and there was no one on the committee that believed that $166 million additional dollars in medical savings could be accomplished next year, so it would be a fraudulent budget to do that,” Williams said.
The governor had previously warned that failing to adopt his plan could force $600 million in cuts to Medicaid services at a time when Kentucky’s economy is a mess, some 10 percent of the work force is unemployed, leaving more people in need of government medical care. He said that could force a reduction in payments to doctors and in medical services to Kentucky residents who depend on the program.
The Democratic- controlled House voted 80-19 to approve Beshear’s plan early last month. The dissenters, all Republicans, objected to the proposed fund transfer, describing it as “robbing Peter to pay Paul.”
Beshear first unveiled the plan in November, calling for managed-care principles that he said would save more than enough money to make up for the $166.5 million and rebalance next year’s Medicaid budget.