Senate budget restores Medicaid funding that House cut, but process is far from over

Kentucky Lantern

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The Kentucky Senate has largely eliminated cuts to Medicaid that were proposed in the House budget. A top state official had warned the House plan would create a hole next year in the federal-state health plan that covers 1.5 million low-income Kentuckians.

“We are pleased that the Senate’s proposed budget restores funding to Medicaid so patients can continue to access the necessary health care services they’re accustomed to,” said a statement from the Cabinet for Health Services, which manages the $15 billion a year federal-state program.

Cabinet Secretary Eric Friedlander appeared before the Senate Appropriations and Revenue Committee last month, along with John Hicks, budget director for Gov. Andy Beshear, asking the Senate to consider restoring the funds the House cut for the 2025 fiscal year that begins July 1.

“This creates a hole in the Medicaid budget for Fiscal Year 25,” Hicks told the committee.

Advocates worry the House plan could force cutbacks in Medicaid services through more than $900 million in cuts to the amount sought by Beshear, a Democrat.

Republicans hold supermajorities in both the House and Senate and generally have expressed support for the Medicaid program that pumps money into hospitals, clinics, pharmacies and other medical services throughout the state—with 70% to 80% of the funding provided by the federal government.

But some have expressed concern it has grown so large.

The Kentucky Center for Economic Policy told the Lantern last month that overall, the House plan cut about $139 million in state funds Beshear sought for Medicaid in FY 2025, which would cause the state to forfeit another $783 in federal matching money for a total of around $922 million.

The Senate moved its budget bills through committee  and to a final vote on Wednesday.

Dustin Pugel, policy director for the center, said Thursday it appeared the Senate had restored most of the funds but made some cuts including a reduction in “waiver programs” for people with disabilities. 

Kentucky legislature asked to end long, worrying wait lists for adults with disabilities

The House plan  included about $200 million — about $143 million of that in federal funds — for 2,550 new slots in Medicaid “waiver” programs such as Michelle P. that provide housing, therapy or other supports for people with disabilities. 

Waiting lists for such services number in the thousands for programs that generally have been increased by 50 or so a year.

The Senate version reduces the number of slots over the next two budget years to 1,925.

And the Senate  did not fund a proposed “mobile crisis unit,” also left out of the House budget that would provide an alternative to police intervention when someone is experiencing a mental health crisis.

But the Senate did include an increase in Medicaid payments for dental services, which oral health advocates say is urgently needed to attract more dentists to the program in a state with high rates of dental disease.

Overall, Pugel said, the Senate plan is “good news for the Medicaid budget.”

However, the budget process is far from over. The Senate changes must be approved by the House — and could end up in a conference committee to try to work out differences — before the current legislative session ends April 15.

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