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Medicaid is OK, DHS says

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NO PANIC: DHS headquarters on Main Street.
  • NO PANIC: DHS headquarters on Main Street.

The Medicaid program provides health care for the poor, and is a huge expense for all states, including Arkansas. So when the Beebe administration announced a major cutback in funding for Medicaid and other state programs, images leapt to mind of hordes of poor Arkansans being denied medical care. But the situation is not so dire, according to a spokesman for the Department of Human Services, which administers Medicaid in Arkansas.

“It's certainly not a gloom-and-doom picture at this point,” Julie Munsell said.

The administration has said that declining state revenues require major cuts in state spending for the fiscal year that begins July 1, possibly as much as $41 million in the amount that was budgeted for Medicaid.

But, Munsell said, “We have $220 million in the Medicaid trust fund to absorb any challenges we face.” The trust fund gets its money mostly from the soft drink tax and the bed tax paid by nursing homes. By law, the fund can be used for Medicaid only. “It's a rainy-day fund, and fortunately we haven't had to tap it in a couple of years,” Munsell said.

Because of the projected reduction in the state's general revenue, DHS will watch Medicaid usage even more closely than usual, Munsell said. But because Medicaid has been ruled an “entitlement” by the courts, “We don't have many options in rolling back services.”

“There've been times in the past when we wanted to eliminate services provided by Medicaid, and we've been enjoined by the courts,” she said. But the state can make changes in the package of services, she said. For example, if Medicaid had been covering six prescription drugs a month, and the state wanted to scale that back to four, it could. While some might consider that a minor change, it would be large to a poor person who needed all six of the drugs.

Still, Munsell said, “Medicaid is not as much of an issue as some of our other programs.” She mentioned children and family services, and aging and adult services. These do not have reserves like Medicaid, and to keep them running acceptably, money will have to be diverted from elsewhere in the DHS budget. Fortunately, DHS has authority to move resources from one area to another where the resources are needed more, Munsell said. She was confident the necessary adjustments could be made. “We're not talking about any reduction of any services in any division, at this point [as a result of a reduction in state funds].”

Such sentiments may reassure DHS clients and their families, but they may also elicit unwanted attention from legislators. Some of them believe that an agency unhurt by budget cuts is an agency with too much money.

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