State Faces Large Health Care Deficits

Print More

(Host) Members of a legislative oversight committee got some grim news on Wednesday about a growing shortfall in state health care funds. Lawmakers are working with the Douglas administration to find a way to solve the budget problems.

VPR’s John Dillon reports:

(Dillon) The health access trust fund pays for many state programs, including children’s health care, pharmacy benefits, and coverage for those without health insurance.

Analyst Steve Kappel of the Legislature’s fiscal office told the committee that the access trust fund cannot sustain its level of spending.

(Kappel) “So bottom line: the current year budget, FY 2005, has an operating deficit of $25 million. So we’ll basically spend down the balance in the health access trust fund. [At] the end of 2005 that fund will be empty, 2006 about $52-53 million in spending more than revenues. So that’s the crisis number at this point.”

(Host) Kappel says the problem will be made worse next year because the federal government will provide less in matching funds to pay for Medicaid programs.

This spring, the Legislature directed the Douglas administration to work together with lawmakers to develop a solution to the funding crisis. Among the options are cutting benefits, implementing additional cost controls, or finding new sources of revenue. Representative Patricia O’Donnell is a Republican from Vernon who chairs the Health Access Oversight Committee. She says cuts it’s not likely the state will chose to cut programs.

(O’Donnell) “No one wants to cut programs. And you know, we sit here and talk about in these meetings about optional programs and what other states do, but we’re talking about human beings. We’re talking about Vermonters that desperately need these programs.”

(Dillon) In the past, the health trust fund has been supplemented by new revenue sources, such as a tax on health care providers. But these new taxes haven’t kept pace with the growth of spending in health care. State Medicaid spending is expected to grow by more than 20 percent in this fiscal year, for example.

O’Donnell says she’d like to see a portion of the state’s general fund – that’s the pot of money that pays for most of state government – dedicated to health care.

(O’Donnell) “So what we need to do now is write legislation saying that, almost like our education legislation, that a percentage of the growth in state government revenue has to go into the health access trust fund, or the health access trust fund revenues have to increase by the same amount of money as our state revenue sources are increasing.”

(Dillon) The state general fund has a surplus of $25 million. New revenues forecasts are due out on Thursday.

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

Comments are closed.