money in the tobacco trust to keep the program afloat.
Gov. Ronnie Musgrove, who had spent the past two weeks outlining the flaws in the proposal, immediately signed it into law.
“What more can I say, but Rep. Steve Holland held his nose as he explained the bill on the (House) floor,” Musgrove said at a Wednesday afternoon news conference in his Capitol office where he announced he would sign the legislation.
“There are some aspects of the bill that in my opinion do a disservice to health care in our state.”
The Legislature is using $108 million in tobacco lawsuit settlement funds this year and $144 million in tobacco lawsuit funds next year to partially fund the agency.
The use of the tobacco lawsuit settlement funds is controversial because legislators voted in 1999 to place the money in a trust fund and spend only the earnings on health-related matters.
The bill passed by the Legislature and signed into law by the governor saves $40 million over a year’s period by increasing to $3 the co-pay for each service a Medicaid recipients receives, reducing other services and cutting reimbursements by 5 percent to health care providers.
Musgrove said the positives of the bill outweigh the negatives. The one redeeming positive, he said, is the legislation continues the Medicaid program, which provides health care for 650,000 elderly, disabled and also needy children.
The Legislature has been wrangling for the past two weeks over how to fund the $150 million Medicaid shortfall during the current slowdown in state tax collections.
Three previous compromises worked out by House and Senate negotiators were rejected by the Senate for various reasons during the past two weeks.
Holland, one of the House negotiators who worked out the compromise finally passed by both chambers Wednesday morning, admitted he did not like the proposal anymore than Musgrove.
“This is certainly not the bill I would have wanted, but I was glad we passed something to save the program,” Holland said.
In the end that sentiment probably led to the overwhelming passage of the bill by a 99-16 vote in the House and a 40-11 vote in the Senate Wednesday morning and the quick decision later in the day by Musgrove to sign the bill.
Without the bill, Rica Lewis-Payton, Musgrove’s executive director of the agency, said she would not have money to send out routine Thursday checks to health care providers this week.
With the bill being enacted into law, Lewis-Payton expressed hope the mechanism could be put in place to send those checks out to health care providers on Friday.
But at Wednesday’s news conference, both Musgrove and Lewis-Payton said the passage of the bill does not solve the problems in the beleaguered agency. The agency still faces a shortfall of $29.5 million in funding for this year and a shortfall in funding of $157.9 million for next year.
Those shortfalls can be multiplied by three because the state receives at least $3 from the federal government for each $1 it spends on Medicaid. Because of those shortfalls, optional health care services for Medicaid recipients would be cut and the economy would be adversely affected, Musgrove said.
Those optional services include prescription drugs, nursing home care and various other programs for Medicaid recipients.
Lewis-Payton and Musgrove expressed hope that the Legislature would further address the lack of funding before the session is finished and before those cuts are enacted. The Legislature is considering a bill that might be used to enact more cuts in the agency.
The governor again urged the Legislature to give him more flexibility in crafting the Medicaid program. Currently, most of that authority rests with the Legislature.
“Our preference would be that we have the authority along with the responsibility to craft a Medicaid program to meet the confines of the budget as outlined by the Legislature,” Lewis-Payton said. The only option the governor and the director of the agency have now is to cut services if the Legislature does not appropriate enough money, Lewis-Payton said.
Holland predicted the governor would not get that authority. He said Musgrove would not make the tough decisions to control the rapidly growing agency.
“He is not planning on cutting services,” Holland said. “He is continuing to seek his borrow-and-spend programs, and is not looking at the long-term stability of the program.”
Musgrove offered a proposal to fund the shortfall without making the cuts. He used one-time money in his proposal – as did the Legislature. Musgrove said the one-time funds could be used this year and next year while ways were found to control the growth in Medicaid.