(Host) There’s some good news in the state’s Medicaid budget: the program needs less money than anticipated for the remaining half of the fiscal year.
But the health care program still faces a deficit in the years ahead.
VPR’s John Dillon reports:
(Dillon) Medicaid covers health care costs for low income and disabled people. It’s funded by both federal and state dollars, and it’s a huge piece of the budget. In this fiscal year, for example, Medicaid is expected to cost $737 million dollars.
The overall Medicaid budget is still growing faster than state revenues. But Joshua Slen, who directs Vermont’s Medicaid program, had some good news for the House Appropriations Committee as it worked on a bill that adjusts this year’s budget.
(Slen) We’re actually requesting an appropriation reduction on the order of $23 million. That’s a gross reduction. That’s state and federal funds…
(Dillon) Slen explained that the main reason for the windfall is that the state got more money than anticipated under a new federal pharmacy program.
But Slen also had some bad news. Medicaid costs continue to climb at almost-double digit rates.
(Slen) We still have almost a 10% growth trend… I mean, that’s a pretty aggressive growth trend …
(Dillon) So he says the state still faces a Medicaid deficit in the years ahead because the growth in the program outstrips the revenues available to pay for it.
(Slen) We in fact had a $40 million deficit, state funds deficit projected. And our current deficit is now down to $20 million in state funds…. And so the effect of this does roll out. It does become a base reduction. It means it makes budgets easier in the out years.
(Dillon) Administrative costs also grew by almost $6 million. That’s due in part to increased marketing and outreach costs for the state’s new Catamount health plan.
For VPR News, I’m John Dillon in Montpelier.