State Medicaid Running a Deficit

Last summer when Medicaid Director Katie Dunn prepared her budget, she anticipated a 3.9% growth in her caseloads.

Historically the Medicaid caseload rate closely mirrors the state’s unemployment rate.

Last week unemployment hit 5.1% in New Hampshire.

Dunn says economist Ross Gittell forecasts that number will keep rising through June.

TAPE: He’s actually predicting that by the end of state Fiscal Year ’09, we will see an 8.5% unemployment rate.

Dunn says in the coming weeks she will meet with the Fiscal Committee to address the nine million dollar deficit.

The Governor’s Office says it is working with Health and Human Services to find possible solutions.

The uncertainty around the economy is making it difficult for Dunn and others in state government to submit budget proposals.

TAPE: so we are now trying to calculate where do we think the bottom is going to be with the recession, and therefore where do we think we are going to be in 2010-2011 to try to give the Legislature as accurate data as possible.

To help get a more complete picture, House Finance Committee members have asked to look at caseload trends from recent recessions.

At this point, Dunn is reluctant to specify how much additional money she will seek to cover her increased costs.

What makes the guesswork especially tricky is that no one at the state level knows when or how much federal stimulus money will make its way to the program.

Republican Representative Fran Wendelboe regrets the state didn’t make the tough choices she says it should have made when it had the chance.

TAPE: we should have been looking at fundamental changes in eligibility rates, capping benefits. All things we could have done, but now the stimulus money has tied our hands completely because anything we might do to reduce that....we can’t do that if we take any of the stimulus money.

In response to projections that Medicaid costs will soar, Wendelboe says she hopes the Democratically- controlled Legislature doesn’t fall into full panic mode.

TAPE: I am concerned that we are perhaps jumping too quickly into too dire of a prediction and possibly have us short other areas because we are trying to put money into this hole which may not be there.

Finance Committee member Democrat Sharon Nordgren compares the Legislature’s attempt to write the budget without knowing about the stimulus money to what local school districts go through every year.

Typically, cities and towns vote and pass budgets before knowing how much money will be coming from Concord.

Nordgren confidently points out that it’s only early March right now.

1:27 we’re hoping by the time the House finishes with the budget we have at least some indication where that money will go and how it can be used, but obviously we might not know all the details until April or May.

The House must complete its budget by early April.

For NHPR News, I’m DG.