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2013: Ark. Medicaid Shortfall Could Hit $400M

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LITTLE ROCK, Ark. (AP) — Arkansas’ shortfall in its Medicaid program in 2013 will be even higher than officials expected and could hit $400 million, the state’s Department of Human Services (DHS) said Thursday.

Medicaid serves elderly people who need nursing home care as well as poor people of all ages.

DHS spokeswoman Amy Webb said officials now estimate the Medicaid program will face between a $350 million and $400 million shortfall in the budget year that begins July 1, 2013. Officials had originally estimated the program would need at least $250 million in additional money that year.

Webb said officials revised their estimates on the expected deficit over the past few weeks, and said the estimate was changed after budget hearings began in January.

“We knew it was going to be higher, but we were focused on the upcoming year’s budget in the budget hearings and getting ready for those,” Webb said.

Webb said the increase stems from a $60 million shortfall the program had expected for the coming year not materializing and because of a drop in the federal matching rate for the program.

Gov. Mike Beebe’s budget for the coming fiscal year proposes a $114 million increase for Medicaid. Beebe spokesman Matt DeCample said the figure doesn’t change the governor’s proposal for the coming year and said Beebe wants to study the reasons for DHS revising the estimate.

“He’s not fully convinced of that number yet,” he said.

Beebe, a Democrat, had rejected a spending cut proposal from House Republicans that would have paid for $14 million of his proposed Medicaid increase from the state’s surplus and would have set aside another $25 million from the surplus to help with the shortfall in 2013.

Beebe had said using the one-time money for the budget that begins on July 1 would only exacerbate the problem because it would still face the ongoing need the following year. DeCample said using the money for the shortfall in 2013 is still a possibility when the Legislature convenes that year.

“The governor’s feeling is that money is not going to go anywhere, so let’s wait until January until we have 10 more months of an overall picture of where we are as a state,” DeCample said.

Earlier Thursday, Burris pointed to the larger shortfall as one of the reasons had pushed for more spending cuts in Beebe’s budget.

“If nothing else, I hope we highlighted the crisis with Medicaid,” said Burris, R-Harrison. “It’s not just coming. It’s here.”

The federal government last year gave Arkansas permission to explore changing the way it pays medical providers for services, and Webb said DHS plans to begin rolling out those reforms in July in a handful of Medicaid programs.

Webb said officials hope the changes will help curb the costs of Medicaid, but it won’t eliminate the shortfall the program faces.

“In the long term, we think it will help us make Medicaid sustainable but we know it’s not going to fix the short term problem,” Webb said.


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