House Nearing Agreement on Ky. Medicaid Budget (KY)

March 30, 2011

Kentucky House lawmakers were closely guarding details of a plan Friday to shore up finances in a government program that provides medical care for more than 800,000 of the state’s poor, elderly and disabled residents.

Republican Leader Jeff Hoover said a keystone of the plan is that it will not raid public school funding.

Hoover said other aspects of the Medicaid budget plan are receiving final tweaks and will be presented privately to rank-and-file lawmakers on Monday before it goes to the House Appropriations and Revenue Committee for a public unveiling and a vote early in the week .

"There are still some lingering questions, some language provisions and other things that we’re going to try to clarify," Hoover said.

Lawmakers have been meeting in a special legislative session since Monday to try to reach a compromise on how to plug a $166.5 million gap in the Medicaid budget.

Gov. Steve Beshear called the lawmakers back to Frankfort less than a week after they ended the regular session because they hadn’t resolved the Medicaid issue. If lawmakers don’t fix Medicaid, Beshear said he will be forced to cut reimbursements to doctors, pharmacists, hospitals, nursing homes and other organizations that care for the needy by 35 percent.

Democratic House Speaker Greg Stumbo, a lawyer from Prestonsburg, said Friday that lawmakers are "inching closer" to an acceptable plan.

"I don’t think anybody is going to say that everybody’s happy with this thing, but that everybody can live with it," Stumbo said.

Stumbo and Hoover have been working together to develop a proposal that will appease Democrats and Republicans in both the House and Senate.

Senate Republicans have been pushing what has proven to be a divisive proposal to cut all government agencies, including public schools. That proposal has been dismissed by both parties in the House who contend that Medicaid shouldn’t be balanced on the backs of students and teachers.

House Democrats, at the behest of Beshear, have been pushing a proposal to shift enough money from next year’s Medicaid appropriation to cover all of this year’s expenses, then privatize portions of the program to save $425 million and rebalance nex t year’s budget. Senate Republicans have insisted on across-the-board cuts to free up money for Medicaid, because, they contend, the Beshear administration won’t have time to get contracts in place with managed-care groups to achieve enough savings to re-balance next year’s budget.

Hoover has been trying to broker a compromise between the Democratic-controlled House and the Republican-controlled Senate.

Senate Republicans delivered a letter to Beshear’s office on Wednesday containing what they called "a roadmap to a compromise." That proposal included cuts to education, a move that Beshear has already said is unacceptable.

Stumbo said Friday that the House plan will make "some concessions" to the Senate, including a provision calling for some targeted cuts that would be imposed only if Beshear is unable to generate his projected Medicaid savings through privatization.