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Much-debated Medicaid issue closes with solution from Representatives

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By Tom McKee

FRANKFORT – After nearly two months’ worth of work, several weeks of intense debate and a long day on Thursday, the Kentucky House of Representatives finalized the legislative session’s most pressing issue: Closing a sizeable deficit in Medicaid.
Our approach was a little different, but the end result accomplished what we wanted, which was to keep the solution within the healthcare program and not needlessly cut millions of dollars out of our classrooms, our local governments, our veteran services and dozens of other state agencies.
If we had not taken this step, we risked seeing payments to healthcare providers who treat Medicaid patients drop by as much as 35 percent during the next three months. That was the only other alternative to balance the budget by the end of the fiscal year, as required by the state’s Constitution.
This issue arose last fall, when Congress did not appropriate as much stimulus money for Medicaid as Kentucky and about two dozen other states had expected. That opened up a deficit of more than a half-billion dollars.
The governor, the House and the Senate agreed that it would be better to handle this over 15 months rather than three. The Governor and the House, though, felt that the best way to fill the gap was to expand the type of managed care programs that have already proven successful in Jefferson and 15 surrounding counties. This is projected to lower costs significantly within the $6.5 billion program.
Senate leaders, however, resisted that approach, preferring instead to make across-the-board cuts to state government to help fill the gap. That included taking money out of the classroom, something we have avoided doing during eight previous budget reductions totaling more than $1 billion.
The House tried to find a compromise during the regular legislative session, but talks ended when the Senate used the session’s final day without the House’s consent. That left Gov. Beshear no choice but to call legislators back in special session.
When the Senate’s latest version came late last week, it became clear that its leaders would not back down from cuts to the classroom and other agencies. At that point, House leaders and Gov. Beshear came up with a different tactic: My colleagues and I would send that bill to him, and he would veto the portions that neither he nor we liked.
That approach led to overwhelming approval, with only two of the House’s 100 members voting against it. On Friday, Gov. Beshear issued the vetoes as he promised, and it immediately became law.  
As a result, healthcare providers will not see their payments cut; schools will not lose millions of dollars; and other agencies that have seen their budgets drop by 20 percent or more in recent years will not have to take an additional hit.
It is worth noting that Gov. Beshear still has to come up with more than $166 million in general government cuts next fiscal year, as called for in the budget adopted last spring. Overall, the state budget will be about four percent smaller than it was in 2009-10.
If there is a silver lining, it is that we haven’t had to take the type of drastic measures other states have. We’ve avoided lay-offs, we’ve managed without any broad-based tax increases; and we have not had to close or severely limit state services.
While solving the Medicaid crisis may be the most talked-about legislation, there are a number of other prominent new laws to come out of the legislative session.
We passed a truly significant update of our criminal code, for example, making Kentucky a model for other states. We also added some needed protections for senior citizens who have been abused or neglected; we outlawed a dangerous new synthetic drug that was starting to gain a foothold here; and we approved a variety of new laws that will benefit veterans and those still serving their country. That includes making it easier for out-of-state veterans to attend college here at in-state tuition rates if they qualify under the Post 9/11 GI Bill.
I’m proud that several of my bills also became law. That includes having state resort parks do more to promote and use Kentucky-grown products and putting more emphasis on removing waste tires from the environment.  
I also worked closely on a new law that sensibly raises the financial amounts that apply in small claims court cases.
Our work to enact new laws may be over, but the legislative process continues throughout the year. I appreciate those who have contacted me in recent months, and encourage you to join them if you would like to let me know your thoughts or concerns.
Should you want to write, my address is Room 332B, Capitol Annex, 702 Capitol Avenue, Frankfort, KY 40601.
You can also leave a message for me or for any legislator at 800-372-7181.  For the deaf or hard of hearing, the number is 800-896-0305.