By Dave Ranney
KHI News Service
TOPEKA, Jan. 19
Usually, when there”s a drop in Medicaid spending, there”s a corresponding decline in state spending.
Not this year.
State health officials on Friday said that in Fiscal 2007, Medicaid spending is expected to fall $41.7 million short of projections.
But the program”s draw on the State General Fund is headed for a $28.6 million increase.
Appearing before the Senate Ways and Means Committee, Scott Brunner, chief financial officer at the Kansas Health Policy Authority, attributed the increase to changes in the federal match rate and to a 43 percent drop in drug rebate revenues.
Rebates from drug companies, he said, “dropped off the edge” after thousands of beneficiaries were moved to Medicare Part D in January 2006.
Instead of the rebates generating $88 million in Fiscal 2007, they”re now projected at $43.4 million.
Fiscal 2007 ends June 30.
Match rate
In Kansas, Medicaid is a 60:40 mix of federal and state funds
for every dollar spent, the state puts up 40 cents.
The state”s share, Brunner said, is subject to calculations that vary from program to program.
This year”s calculation, he said, pushed the state”s overall match to 41.3 percent; it had been 39.7 percent.
“That may not sound like much of a swing,” but when you”re looking at a base of $1.2 billion it adds up pretty quick,” Brunner said. “One percent of $1.2 billion
is $12 million.”
The boost, Brunner said, was due to the state”s improving economy.
Brunner said he expects a $63 million increase in Medicaid spending in Fiscal 2008, which begins July 1.
“That”s a little more than 5 percent,” he said. “Historically, that”s fairly typical.”
Much of the increase, he said, is driven by projected increases in the numbers of children and disabled adults becoming eligible for services.
Also, the rebate revenues are not expected to rebound.
“We”re anticipating a $4.9 million decrease (in rebate revenue) from 07 to 08,” Brunner said.
Dave Ranney is a staff writer for KHI News Service, which specializes in coverage of health issues facing Kansans. He can be reached at
dranney@khi.org
or at 785-233-5443, ext. 128.