Fiscal report shows Medicaid deficit in 2005

Print More

(Host) The Legislature recently trimmed the state budget to erase a $39 million deficit. But a much bigger budget problem looms on the horizon. In several years, the state could run out of money to fund its Medicaid programs. Fiscal analysts now predict a Medicaid fund deficit in 2005.

VPR’s John Dillon reports.

(Dillon) Medicaid pays for health care for the elderly, the poor and the disabled. It’s one of the largest appropriations in state government, and it’s headed for a deficit.

The latest analysis by the Joint Fiscal Office shows that by July of 2005, the Medicaid program will be about $16 million short. By the next year, it faces a $50 million deficit. Steve Kappel crunched the numbers for the Joint Fiscal Office:

(Kappel) “You’ve got the growth in the program, which is driven by both medical inflation and the caseload. And you’ve got revenue sources which are likely to be flat or even declining in future years.”

(Dillon) The Legislature fixed the hole in this year’s Medicaid budget by raising cigarette taxes. But as cigarette prices rise, more people are likely to quit, so the tax isn’t sustainable.

House Appropriations Committee Chairman Richard Westman says the Legislature knew that it had postponed, not solved, the Medicaid budget problems. He says the Legislature may make cuts in program benefits.

(Westman) “And to deal with these problems, it’s going to continually to be slow steps that are painful. Because you have to look at it thoughtfully, because it takes a long time to bring the whole of the Statehouse and the advocate community together, so they understand the problems and they understand where we have to go in this.”

(Dillon) Westman says he welcomes the report by the Joint Fiscal Office because it gives lawmakers the long view they need to adjust Medicaid in two or three years.

For Vermont Public Radio, I’m John Dillon in Montpelier.

Comments are closed.