Legislature prepares to deal with Medicaid shortfall

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(Host) A growing deficit in the state’s Medicaid program means the Legislature won’t have any new money to expand health coverage for the uninsured. That’s the warning from Senate President Pro Tempore Peter Welch. Welch says he wants lawmakers to focus on cutting costs in the health care system.

VPR’s John Dillon reports.

(Dillon) State officials learned this week that the Medicaid deficit is growing even faster than they feared. The Vermont Health Access Plan, the state’s main program for covering the uninsured, faces a funding shortfall of $15 to $20 million in this fiscal year. In the following fiscal year, the deficit is expected to grow to $60 or $70 million.

Senate President Peter Welch says this presents the state with a hard financial reality.

(Welch) “I think it does two things. One, it definitely constrains us because obviously we’ve got to take care of the deficit before we can talk about expanding existing programs. So in that sense, it’s clearly a major restraint. But secondly, I think what it demonstrates is that if we’re going to be successful on extending access and giving some relief to employers and employees with the health care costs, we’ve got to focus on the cost side. And that’s something that we simply haven’t done successfully. It takes some structural reform.”

(Dillon) Welch says that one reason for the growing deficit in the state fund is that the federal government has cut its share of Medicaid costs. He says that the feds control both the purse strings and the legal framework for a large part of the health care system.

(Welch) “So the kind of things we can do are somewhat limited. And I think our objectives have to be realistic. We can’t spend our way out of this or tax our way out of it. But we can start trying to reorganize our health care system and find the savings where they’re there, where people know they’re there – administration, and in some cases, over-utilization.”

(Dillon) The new Democratic majority in the Vermont House wants to make health care a top priority. House leaders plan to name a special committee to oversee the reform efforts. Welch says that the Senate will probably not name a special committee, but will tackle health care issues through its existing committee system.

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

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