Photo caption: Cindy Beane, commissioner for the state Bureau for Medical Services, talks to lawmakers about Medicaid’s projected $114 million shortfall for fiscal year 2025 on Tuesday, Dec. 12, 2023, in Charleston, W.Va. (Will Price | West Virginia Legislative Photography)
Commissioner proposes raising tax for managed care organizations
BY: LORI KERSEY – DECEMBER 12, 2023 6:14 PM
West Virginia Medicaid faces a budget deficit of $114 million in the next budget year, Cindy Beane, the state’s commissioner for the Bureau of Medical Services, told lawmakers Tuesday.
Beane presented an update on the program to members of the Joint Committee on Government and Finance.
Medicaid makes up the largest portion of the Department of Health and Human Resource’s budget, she said. Approximately 36 percent of West Virginia residents get their health coverage from the program, she said. The program is jointly paid for by the federal and state governments.
In the current fiscal year, the federal government paid more than $1 billion in expenditures for Medicaid and the federal government paid more than $4 billion, according to Beane’s presentation.
For fiscal year 2025, which begins in July, the agency is projecting more than $5.2 billion — with the federal government paying $4.3 billion and the state paying $1.2 billion.
Beane pointed to a number of “budgetary drivers and risks” that contributed to the shortfall, including what’s referred as the public health emergency unwinding, rising prescription drug costs, policy decisions to increase payments to providers, lawsuits and court orders to expand benefits and payments, and other factors.
For three years during the COVID-19 public health emergency, the federal government gave states enhanced Medicaid funding to not remove people from the program during the pandemic.
West Virginia’s Medicaid numbers swelled from 504,760 people in March 2020 to 667,471 people at its highest during COVID, she said.
Beginning in April, the state and others around the country started the “unwinding” process of removing people from the program who no longer qualified for the program and those who did not fill out paperwork to renew their coverage.
Months in the unwinding process, the state’s Medicaid program is down to an enrollment of 539,250, she said.
The enhanced federal money to the state program has decreased slowly and will be zero beginning in 2024,according to the presentation.
To fix the budget hole, Beane suggested raising the tax Medicaid charges managed care organizations to a maximum of 6 percent.
“That can conceivably raise a little over $100 million in order to fill the current deficit that the Medicaid programs have,” she said.
The tax is “not a typical tax” in that it’s folded back into the rates that managed care organizations charge, she said.
If the tax is not increased, other cost containment measures she suggested are provider rate cuts, rate freezes, eliminating optional benefits and delaying the implementation of Certified Community Behavioral Health Centers and mobile crisis intervention services. The state may also delay payments to the next fiscal year, she said.
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https://westvirginiawatch.com/2023/12/12/medicaid-faces-114-million-budget-deficit-next-year-lawmakers-told/