Kentucky Medicaid spending is unsustainable, study will say

When it is released June 29, a study sponsored by the Bluegrass Institute for Public Policy Solutions will show Kentucky is an on "unsustainable path" when it comes to Medicaid spending.

A press release about the report says two of three children on Medicaid cannot get appointments with specialists. This happens to only one of 10 privately insured children. "Without essential, sweeping reform, Medicaid will continue wasting Kentucky's resources on a grossly over-expanded enrollee base while failing in its fundamental mission of providing access to health care for the truly impoverished," the release says.

While Medicaid has gaps in care, states are struggling to pay for it. Kentucky was $166 million short in meeting its Medicaid budget this year, prompting the state to turn to managed-care organizations. Help from the economic stimulus will run out June 30. "The end of this increase in federal matching funds means that an increase in the state share of Medicaid in all states comes at a time when states are still experiencing fiscal stress related to the economic downturn," a Kaiser Family Foundation release states.

A Kaiser fact sheet shows Kentucky spent nearly 23 percent of its total state spending on Medicaid in 2009. In anticipation of the effects of the economic downturn, the state received a considerable boost from stimulus funds in fiscal year 2011 to help pay for Medicaid; its federal medical assistance percentage, which was based on the state's per capita income, was about 81 percent compared to 56 percent nationwide. However, that number will drop to about 71 percent starting July 1. Even so, the state's unemployment rate is still 10 percent, 1 percentage point higher than the national average.

The Bluegrass Institute study's author, John Garen, a University of Kentucky professor of economics, projects Medicaid spending could rise exponentially in the coming years, even though state and federal spending already rose from $3.3 billion to $5.1 billion between 1999 and 2009.

The study was co-sponsored by the Bluegrass Institute and the BB&T Learning Laboratory on Capitalism. It will be released at 12:30 p.m. June 29 at Room 248 of UK's Gatton College of Business and Economics Building. (Read more)