Ark. Medicaid faces nearly $200 million funding gap

State finance officials said Tuesday that Arkansas' Medicaid program will face a nearly $200 million shortfall next year even if lawmakers agree with Gov. Mike Beebe's proposals to increase funding and use one-time money to help the agency.

The Department of Human Services told members of the Joint Budget Committee it needed $359 million in additional funding from the state for its Medicaid program next year. Gov. Mike Beebe has proposed using $90 million in general revenue and $70 million from the state surplus to fill the gap for the budget year that begins July 1, 2013.

It was unclear how the department planned to fill the gap in the program's funding. DHS Director John Selig was expected to address the panel on the shortfall Tuesday afternoon.

"The good news is we have made some significant progress on our Medicaid shortfall," Selig told the panel as it opened its hearing on the department's budget. "We've still got quite a ways to go, and we're facing some very significant reductions in Medicaid."

The latest budget figures came out a week after Republicans won control of the Arkansas Legislature for the first time since Reconstruction. GOP leaders have said they want to address the shortfall before taking up a proposal to expand Medicaid under the federal health care law.

Beebe, a Democrat, supports expanding Medicaid's eligibility, which would add about 250,000 people to its rolls in the state, but has noted that its approval will require the support of 3/4th of the House and Senate. Under the federal law, the federal government agreed to pay the full tab for the Medicaid expansion when it begins in 2014. After three years, states must pay a gradually increasing share that tops out at 10 percent of the cost.



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