For Immediate Release from LRC March 21, 2011
Medicaid bill passes House, goes to Senate
FRANKFORT — The
House voted 94-4 tonight to allow the governor to fill a $139 million state
Medicaid shortfall through expanded Medicaid managed care programs.
House Bill 1,
sponsored by House Appropriations and Revenue Committee Chairman Rick Rand,
D-Bedford, would allow the $139 million to be drawn from $166 million that the
Executive Branch would be allowed to move from the fiscal year 2012 Medicaid
budget to meet this fiscal year’s obligations. Medicaid expenses for
fiscal year 2012 would be met through managed care efficiencies, according to
the legislation. The governor would also be allowed to use $23.1 million freed
up through government transfers, if necessary, to meet next year’s
HB 1 also
includes a provision that Rand said would
allow the governor to "take full advantage” of an enhanced federal
Medicaid match, saving the state around $12 million.
governor cannot certify to lawmakers by August 15 of this year—after
state Medicaid managed care contracts are signed—that he can meet the
fiscal year 2012 obligations through managed care savings and other authorized
actions, he would have until Oct. 1 "to demonstrate to us the cuts that
would need to be made in order to balance the budget for the remainder of the
year,” Rand said. Lawmakers have said those cuts, if necessary, would be
made across state government with few exceptions including, but not limited to,
K-12 education and state universities.
have every confidence that the governor can make (the managed care approach)
work,” Rand said. "It’s
working in other states.”
Lee, R-Lexington, said he understands that HB 1 would create a roughly $420
million hole in Medicaid that would have to be filled in fiscal year 2012. Rand said that is "roughly accurate,” adding
that the governor assures lawmakers that he can handle fiscal year 2012
obligations through expanded managed care.
Rand explained the
House’s intent to allow the governor to manage Medicaid, as has been the
custom in the Commonwealth.
have always let the Chief Executive in this state manage the Medicaid budget,
and that is what we are doing now,” he said.
HB 1 also
limits the governor’s debt restructuring this budget cycle, requires the
governor to meet $169 million in already-required efficiency savings next fiscal
year through contract reductions and non-merit employee reductions, and orders
any surplus state revenue be placed into the state’s "rainy day
fund”—or budget reserve trust fund—among other things.
that moves $18.9 million in postsecondary education funding from fiscal year
2012 to fiscal year 2011 is also found in the bill.
HB 1 now goes
to the Senate for its consideration.