Virginia can’t balance its budget without looking for ways to cut Medicaid costs, Gov. Tim Kaine said Tuesday, signaling that one of the largest and fastest-growing state spending items could be on the chopping block when lawmakers meet early next year.
State legislators this year pumped $350 million more into Virginia’s two-year budget to accommodate growth in the federal health program for the elderly, poor and disabled, according to a Senate Finance Committee report last week. Still, the commonwealth ranks 48th in the nation in per-person Medicaid spending.
The national economic downturn has thrown the state’s $77 billion budget out of balance by at least $2.5 billion, and possibly more, as tax collections fall far short of projections.
Kaine said on his monthly “Ask the Governor” program on WTOP radio that “there is no way to make [the budget] balanced when revenues slow without looking at Medicaid,” while acknowledging Virginia’s already “conservative” eligibility and benefit levels.
“Because revenues are so tight right now, and we’re basically in a reduction mode, I’m not going to be able to say that in the next year, for example, I’m going to be able to do too much expansion on the Medicaid side,” Kaine said. “In fact, with virtually everything in state government, I’m having to do what families and businesses are doing right now, which is we got to tighten our belts, try to be smart about how we do it to protect vulnerable people.”
Lawmakers expect a struggle to maintain the program during the 2009 legislative session, which begins in January, especially as economic hardship increases the demand for it.
Del. Kristen Amundson, D-Mount Vernon, a member of the House Health, Welfare and Institutions Committee, expects Medicaid spending to be a central issue of the session.
And with state reimbursements to health care providers such as hospitals and nursing homes already so low, she said finding savings is going to be a “enormous challenge.” Amundson suggested using medical technology to streamline medical records, among other measures.
“I think that this is going to be one area, and K-12 education is going to be another, where we are going to have some serious struggling and really think through what our priorities are,” she said.
