Budget would add $782 million for Medicaid

Facing exploding growth in the government-run health insurance program for the poor and disabled, Gov. Steve Beshear's proposed budget calls for spending an additional $782 million on Medicaid over the next two years.

Beshear said the Medicaid program is adding an average of about 3,400 recipients each month, compared with 930 each month just two years ago.

"We now have over 789,000 Kentuckians in the Medicaid program," Beshear said. "That's nearly one in five of our citizens depending on us for their health care."

Despite the increased spending, Beshear has directed the Medicaid program to cut costs by $108 million over the next two years.

Beshear's proposed budget also protects mental health services from cuts and includes $129 million in bond funds to construct a new Eastern State Hospital in Lexington. But his budget calls for 2 percent cuts to the rest of the Cabinet for Health and Family Services.

The Cabinet for Health and Family Services is one of the state's largest, including agencies such as public health, child and adult protection, food stamps, and services for the elderly.

The Cabinet will try to stretch resources, said spokeswoman Vikki Franklin. However, "inevitably, this downward spiral ... erodes our ability to assist families in meeting basic needs, provide child and adult protective services, meet the public health and welfare needs of Kentuckians, and to provide services to our most vulnerable citizens — at a time when they're needed more than ever," she said.

Beshear's budget made no mention of funding the "Boni Bill."

The bill, passed in 2007 following the slaying of a social-worker aide by a parent, called for spending $6 million to hire more front-line staff, increase security at cabinet offices and establish neutral family visitation sites at cabinet offices. Much of that spending never happened.

Given the 2 percent cut in Beshear's proposed budget, Franklin said additional Boni Bill funding is unlikely.

However, if the state gets additional federal stimulus funds, the governor pledged to restore funding to the cabinet's Department for Community Based Services, which oversees child protection and eligibility for food stamps.

Terry Brooks, executive director of Kentucky Youth Advocates, said the proposed 2 percent cut to the cabinet comes at a time when Kentucky leads the nation in the rate of children who die from abuse and neglect.

And, Brooks said, families are going to go from "struggling to hitting a crisis" if there's no valid source of revenue to balance the budget.

The governor said that without $780 million in expanded-gambling revenue, the proposed cuts to everything in the cabinet except Medicaid and mental health would be greater — 14 percent in the first year of the biennium and 34 percent in the second year.

Brooks said his group is in favor of tax reforms as a revenue source — not expanded gambling.

In another area, Beshear's budget eliminates the requirement for a premium payment from parents of children covered by the Kentucky Children's Health Insurance Program. The inability of some parents to pay that premium is preventing 700 children a month from getting the insurance, Beshear said.

Sheila Schuster, executive director of the Kentucky Mental Health Coalition, said she was pleased the governor protected mental health programs, which she said have been chronically underfunded.

Money for the Eastern State psychiatric hospital project was appropriated in the 2008-2010 budget. But, in a move to save money, the state will now issue the bonds instead of Lexington's city government.

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