KHN Morning Briefing

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Kentucky, Delaware Lawmakers Struggle With Medicaid Budget Shortfalls

Kentucky officials report a Medicaid funding gap of more than $600 million over the next two years and Delaware is looking at a $28.5 million shortfall this year. News outlets also report on a proposal in the Alabama legislature that would cut the governor's budget request for Medicaid, a bipartisan effort in Alaska to revamp the program and reaction in Iowa to federal approval of the governor's plan to have private insurance companies run the Medicaid program.

The Associated Press: Kentucky's Medicaid Program Faces $611 Million Shortfall
Kentucky's Medicaid program is facing a $125 million deficit this year and a $611 million deficit over the next two years as it struggles to keep up with an aging population, a flood of new enrollees and the end of 100 percent federal funding for its expanded eligibility requirements. Kentucky Health and Family Services Cabinet Secretary Vickie Yates Brown Glisson told House budget writers Wednesday the problem is so bad she worries about the sustainability of the program that provides health insurance for more than a quarter of Kentucky's population. (Beam, 2/24)

Louisville Courier-Journal: Medicaid Hemorrhaging Money, Official Says
Kentucky's Medicaid program is "hemorrhaging" funds and not sustainable, the state's top human resources official said Wednesday. ... Glisson said projected shortfalls in the $10 billion-a-year government health plan for the poor and disabled amount to about $125 million in the current budget year and around $600 million over the next two years. She said officials now are working to find ways to manage the shortfall. Gov. Matt Bevin has spared Medicaid from any cuts in his proposed two-year budget. (Yetter, 2/24)

Delaware News Journal: Delaware Medicaid Budget Reports $28.5M Shortfall
Costly high-level pediatric care is driving a large part of a $28.5 million increase in Delaware's Medicaid budget request, officials said Wednesday. Overall, the request calls for a 10.4 percent increase to Delaware's Medicaid budget for the next fiscal year, increasing it from $741.8 million to about $770.3 million. The abrupt increase comes after the Medicaid department recalculated its funding projections and crunched open enrollment numbers for Highmark Blue Cross and Blue Shield of Delaware, one of the state's two Medicaid-managed care organizations. (Rini, 2/24)

The Associated Press: Delaware Medicaid Officials Increase Cost Projections
State Medicaid officials are facing an estimated shortfall of $28.5 million in Gov. Jack Markell’s proposed budget for the upcoming fiscal year because of higher-than-expected costs. Officials told lawmakers Wednesday that while Markell’s budget proposal includes $40 million in additional Medicaid spending, they now expect they’ll need more than $68 million. (Chase, 2/24)

Montgomery (Ala.) Advertiser: Senate Committee Approves General Fund With Flat Funding
The Senate’s Finance and Taxation General Fund committee Wednesday approved a budget about $104 million less than Gov. Robert Bentley’s $1.9 billion proposal from earlier this month. State agencies would generally receive about the same amount of money in the budget. ... Level-funding could be a problem for the state’s Medicaid Agency, a backbone for Alabama’s health care system. The agency would get $685 million in the budget – less than the $785 million officials say they need to maintain services and continue moving the program into a managed care model. ... The budget likely will not be the final form that becomes law. House leaders last week said they hoped it would be the start of a conversation about the needs in the budget. (Lyman, 2/24) Proposed Budget Launches Debate On Medicaid Funding
The Alabama Senate's General Fund committee today unanimously approved a budget that would level-fund the Alabama Medicaid Agency, which had sought an increase of at least $100 million. Chairman Trip Pittman, R-Montrose, said the bill is mainly to launch a debate about the question of how to pay for Medicaid while also tending to other critical services, such as prisons, Mental Health, DHR and courts. (Cason, 2/24)

Alaska Dispatch News: With Medicaid Expansion Now A Fact, A Reform Bill Moves In Alaska Legislature
A state Senate committee on Wednesday unveiled a newly updated, wide-ranging bill to modernize Alaska’s public Medicaid health care program, with lawmakers and top officials from Gov. Walker’s administration endorsing the legislation. “They spent a lot of time to come up with a really, really great product,” Valerie Davidson, the state health commissioner, said in an interview. The new bill comes after lawmakers and the Walker administration spent a year working on reforms to the $600 million Medicaid program, which consumes about 15 percent of the state’s operating budget. (Herz, 2/24)

Des Moines Register: Medicaid Oversight: 'Where’s The Teeth?'
Lawmakers who had worked to slow down or derail Iowa’s effort to privatize Medicaid management have a new focus following Tuesday’s federal approval: oversight. And while it appears the effort has more bipartisan support than failed efforts to terminate the privatization plan, criticisms were voiced Wednesday from disability rights advocates who say the new effort is too shallow. They want the fast-moving oversight bill to grant a state oversight group the ability to levy fines and pursue sanctions against companies that partake in fraud or mismanagement. (Clayworth, 2/24)

Des Moines Register: Culver Tells Iowans: 'Be Heard' On Medicaid Controversy
Former Iowa Gov. Chet Culver says changes in Medicaid health care represent one of the state's biggest public policy shifts in the past 50 years, and he's urging Iowans to speak out and being heard. Culver, a Democrat, told about 100 people at an Iowa Capitol rally on Wednesday he has concerns about Republican Gov. Terry Branstad's plan to have private firms assume management of Medicaid for about 560,000 low-income and disabled people. (Petroski, 2/24)

Meanwhile, news about two insurance companies —

Modern Healthcare: WellCare's Shopping Begins With S.C. Medicaid Plan
WellCare Health Plans has acquired Advicare Corp., a Medicaid managed-care company based in South Carolina, marking WellCare's first acquisition in almost two years. The deal comes just two weeks after executives at WellCare, a for-profit insurer headquartered in Tampa, Fla., made it clear they are actively hunting for health plans. WellCare has about $1.25 billion to spend on transactions. (Herman, 2/24)

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