The coming Medicaid crunch | Arkansas Blog

The coming Medicaid crunch

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Seth Blomeley's preview in the Democrat-Gazette (sub. reqd.) of the next week's legislative session mentioned the exploding Medicaid budget and the likelihood of cuts in coming years.

No kidding. I think it may be the next big story about tough times and state government, sooner rather than later.

A caller here late Friday said Medicaid contractors had been told in meetings last week that the state was facing $100 million in cuts to its contribution to Medicaid in fiscal 2011, which begins July 1. That means a $400 million cut overall, counting the roughly 3-1 federal match.

I got a brief e-mail response Saturday from Julie Munsell of the Department of Human Services to my inquiry about this.  She said:

It's what's needed to keep FY11 spending level with FY10. The Medicaid director met with providers last week to solicit input on where they thought this size of a reduction should occur. He asked that they give feedback by March 1.

And why do you need budget cuts to keep spending "level"?

In addition to seeing more eligible Arkansans, medical expenses grow about 6-8 percent per year. So puting in no growth to the budget actually requires some cost containment measures.

This is a complicated topic in need of much more explanation, but I thought I'd reveal at least a tip of the proverbial looming iceberg.


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