Medicaid: $600 Million Shortfall

According to a recent report released by the state’s Medicaid forecasting group, Iowa will have to find ways to fill a $600 million gap to pay the state’s share of Medicaid next year. This is a direct result of the massive use, by Gov. Culver and legislative Democrats, of one-time funds to pay for the program this year.

“We warned people that the decisions being made by legislative Democrats and Gov. Culver were going to come back to haunt us,” said Rep. Dave Heaton (R-Mount Pleasant). “The Medicaid budget now has a Grand Canyon-sized hole.”

Every month, staff from the Department of Human Services, the Department of Management, and the non-partisan Legislative Services Agency meet to develop and revise projections for the state’s cost of the Medicaid program. Tuesday’s release is the first projection for the FY 2012 costs of the program. The forecasting group projects that Medicaid will cost Iowa taxpayers $1.184 billion in 2012, while recurring funding levels will only provide $584 million.

In the current budget year, Iowa is relying on $464 million dollars of one-time funding to pay for the program. These funds come from additional federal matching funds, the state’s Cash Reserve Fund, carry-forward of balances in various DHS programs, and the elimination of the Senior Living Trust Fund. None of these funds will be available in 2012.

“This is just the latest in a long list of fiscally irresponsible decisions made by Gov. Culver and legislative Democrats,” said House Minority Whip Linda Upmeyer (R-Garner).

The full report can be viewed here.