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Wednesday, August 31, 2011 - 8:00am

Medicaid's Half A Billion Dollar Hole

The department that funds Medicaid needs hundreds of millions of dollars to fill its budget this year and next. The shortfall is no surprise to budget writers.

Scott Frederking with the Department of Community Health says much of the half a billion dollar hole came from using Medicaid money to pay for other programs, including a shortfall in the state employees’ health insurance.

"So this was essentially borrowing some dollars out of Medicaid to fill some gaps in the state budget and I believe it was understood that these dollars would be replaced when legislators came back to town to fill the amended budget," says Frederking.

Top budget writers in the senate say one of the remedies will be revenue growth. Republican Jack Hill is the Senate Appropriations Chairman.

"We’ll fill it the same way we will every hole," says Hill. "We’ll have some growth to try to fill these holes with and there will be some budget reductions the governor has already asked for."

Hill says the 2012 budget relies on five percent revenue growth. Growth from the first month of the fiscal year July was seven percent. The governor recently asked agencies to cut their budgets two percent this year.