Legislative leaders met in a meeting of the House appropriations committee this morning to consider S.B. 797, which would allocate funds to meet the state’s current year Medicaid shortfall. Estimates of this year’s Medicaid budget gap have proved to be a moving target, initially estimated at around $139 million, then growing to $149 million in the wake of a federal court order reinstating coverage of personal care services for adults with disabilities. This morning, House appropriations chair Rep. Brubaker explained that legislative leaders and the Office of State Budget and Management have agreed to revise the estimate of the current-year Medicaid shortfall upwards to $205 million, with the increase being driven by higher-than-estimated program utilization across all categories of eligibility.
Not mentioned in this morning’s discussion was legislative leaders’ insistence last year that the current budget adequately funded the Medicaid program, despite disagreement expressed by the Department of Health and Human Services, legislators, and advocates representing Medicaid’s numerous and diverse stakeholders.
S.B. 797 creates a prioritized list of funding sources for the current-year Medicaid shortfall and requires that each source of funds be used (up to the amount specified) before the next is tapped. The list is:
- $50 million in funds available within the Department of Health and Human Services, excluding transfers of unearned or borrow Medicaid Disproportionate Share Receipts, delay of drug rebates, or transfer of any funds that will create or increase a financial obligation in FY2012-13 or beyond;
- $10.5 million from the portion of the state’s Repairs and Renovations Reserve Account that are currently allocations to DHHS;
- $105 million in projected current-year General Fund reversions from all state agencies and departments, including debt service reversions;
- $20 million in projected revenue overcollections. If used, this amount would have to be deducted from the forecasted $232 million revenue surplus for FY2011-12.
- A further $20 million from the Repairs and Renovations Account, if necessary.
The impact of this measure on total availability for the FY2012-13 budget is not entirely clear and will depend on how much money is actually drawn down to pay Medicaid claims for the current year. To the extent that agency reversions and the revenue surplus are used to fund Medicaid, availability for other General Fund purposes will be decreased. Similarly, the upcoming Medicaid shortfall for FY2012-13, currently estimated at $243 million, is unaddressed by this legislation.