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Numbers come out on Medicaid shortfall for FY2012-13

Medicaid program staff released updated estimates of the current year’s Medicaid state funding shortfall as well as their estimate of next year’s shortfall at the monthly meeting of the Medical Care Advisory Committee [1].¬†As has been reported elsewhere, the recent court order reinstating coverage of personal care services for adults with disabilities [2], the Division of Medical Assistance added $9.4 million in estimated expenses into the current year’s budget, driving the current year shortfall up to $149 million.

Next year’s estimated shortfall of $243 million [3] will be driven by many of the same factors that created this year’s problem, according to DMA Chief Business Operating Officer Steve Owen. The legislature’s double-cut to program inflation – a measure built on expectations about changes to Medicaid that are beyond state administration’s control, such as federal changes and provider costs – shows up yet again as a confounding factor in an already cash-strapped budget.

The Medical Care Advisory Committee remains opposed to across-the-board provider reimbursement rate reductions, despite the fact that there are few budget reductions options beyond provider cuts left within the executive branch’s purview. Owen reminded attendees that states cannot run deficits and that DMA is working closely with OSBM to identify a solution that, presumably, won’t require legislative action.

As one committee member asked, what happens next? The answer: no one knows.