Kentucky Senate failed to heed governor’s warning on Medicaid

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Last fall, when the General Assembly finalized the calendar for the 2011 Regular Session, this past week was scheduled to be one of the quietest of the year.  It was set aside as part of a 10-day period known as the veto recess, which gives the governor time to consider legislation sent to him and then gives legislators a chance to use the session’s final day to consider vetoes, if any occur.

As that veto recess began approaching, however, it became increasingly clear that this past week would not be as quiet as expected.  When middle ground between House and Senate leaders could not be reached on the session’s most pressing issue – closing a significant deficit within Medicaid – there was hope in the House that we could use this time to find a compromise that the legislature could then approve on Monday this week.

Senate leaders kept that from happening, however, when it chose to meet, without the House, on the first day of the veto recess.  As a result, the session ended without an opportunity to consider vetoes or vote on a Medicaid compromise.

That left Governor Beshear with a difficult choice.  He could either call the General Assembly back to the Capitol, or he could begin initiating 35 percent cuts over the next three months to healthcare providers that serve Medicaid patients.  That is the only option he has to balance the budget, as constitutionally required by the end of the fiscal year.

It’s instructive to note that this is not an unexpected issue.  Governor Beshear had warned about it in November and offered a sensible solution that the Kentucky House of Representatives went on to support in early February.  Unfortunately, the Senate’s counterproposal – built in large part on across-the-board cuts for state government, including the classroom – came just a few days before the veto recess.

This past week, the House began taking a much more in-depth look at two scenarios: What would happen if the Senate’s cuts were enacted on top of more than $1 billion in reductions during the last three years, and what would happen if healthcare providers serving Medicaid patients took a 35 percent cut.  Not surprisingly, neither was positive.
During a meeting of the House Judiciary Committee, for example, we heard from Justice and Public Safety Secretary J. Michael Brown, who testified that the just-passed landmark overhaul of the state’s criminal code would be greatly hampered if additional cuts took place.

Prisons would lose more than $7 million; public advocates would potentially lose more than 50 attorneys, pushing caseloads past 500 for those attorneys that remain; and Commonwealth’s Attorneys would lose 20 more attorneys.  Domestic violence programs would also be severely curtailed, as would substance abuse treatment.

Other agencies would take steep hits as well.  If the Senate’s original proposal for cuts were added to current reductions, the Attorney General’s office would have 20 percent less revenue from the state next fiscal year than it had in 2009-10.  Public health programs would have 16 percent less; Kentucky State Police would have 13 percent less; and our public postsecondary schools would have 10 percent less.

If no action is taken on this issue, however, the news would be even worse for many healthcare providers.  Hospitals could lose as much as $135 million in the next three months, and one nursing home operator said his seven nursing homes would lose nearly half of their income.

While this issue can seem confusing and overloaded with numbers, the House plan is simple to describe.  It works out the Medicaid shortfall within that program, as we have done with previous shortfalls over the years, and does it without further cuts to any state agency or school. Eighty percent of the General Assembly agrees that the classroom especially should not be touched.

The House plan does require moving money forward that had been set aside for next year, but there is ample evidence that this could be made up in large part by expanding the type of managed care programs that have worked so well during the last dozen years in the 16-county Louisville area.

The hope is that we can wrap up our work this coming week, and like you, I am hoping that it is sooner rather than later.  On Wednesday, the House did approve the other item Governor Beshear included on the session’s agenda: Raising the high school dropout age from 16 to 18.  That, too, has considerable evidence in support, and would largely stop the 6,000 dropouts we see each and every year across the state.  If the Medicaid crisis is about today, the dropout issue is about tomorrow.

If you have any thoughts or concerns about these issues, please let me know. I hope to hear from you soon.

Rick Rand, D-Bedford, represents the 47th House District in the Kentucky General Assembly. He may be reached by writing to Room 351C, Capitol Annex, 702 Capitol Avenue, Frankfort, KY 40601, or leave a message at (800) 372-7181 – TTY (800) 896-0305.