A bit of budgetary fantasy is ballooning into a nightmare: a $1 billion Medicaid shortfall — at a time when the health care program is adding about 3,000 poor, elderly or disabled Kentuckians a month.
The most recent bad news came when Congress failed to come through with as much federal aid to Medicaid as legislatures in Kentucky and many other states had counted on.
This was no surprise, given the anti-spending political climate; both Gov. Steve Beshear and this editorial page warned Kentucky lawmakers against relying too heavily on federal help.
This most recent blow, which will cost Kentucky Medicaid about $470 million, comes on top of $584 million in cuts the legislature ordered the administration to make to balance the Medicaid budget in the current fiscal year.
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The legislature did not specify how or where the cuts should be made.
But one thing is sure: Slicing a half-billion, much less a billion, dollars from Medicaid will wreak great harm on the vulnerable Kentuckians who depend on the program and also on the state's economy. Hospitals, nursing homes, doctors offices, clinics and pharmacies all depend on Medicaid dollars to make their payrolls.
This really is a crisis.
It's a shame that a country and Congress that borrowed billions to wage a needless war in Iraq while cutting taxes now decides it can't afford to care for its poor children and seniors during the worst economic times in most of our memories.
Still, Kentucky lawmakers do have options. Kentucky's cigarette tax of 60 cents a pack is less than half of the national average of $1.45 a pack. Polls have shown most Kentuckians would support further increases in the cigarette tax, especially if the revenue goes for health care.
Smoking is responsible for a large percentage of Kentuckians' disease and disability. So there's a logic to requiring smokers to foot more of the health care bill. Increasing the cost of cigarettes is also the surest way to reduce smoking, which would produce Medicaid savings over time.
Medicaid is a good deal for Kentucky. The state now receives about $4 from the federal government for every $1 in state-generated funding that goes into the program.
Kentucky needs about $225 million in state funds to fix the billion-dollar hole in Medicaid. A $1 increase in the state tax on a pack of cigarettes would produce almost enough money to take care of the Medicaid shortfall.
Certainly, the administration and legislature should also work together to improve Medicaid's efficiency.
Most of what we've seen, so far, though, is a lot of finger-pointing. That might score political points for some, but it does nothing to solve this crisis.