Beshear critical of Medicaid provisions in state budget bill

Democratic Kentucky Gov. Andy Beshear says the state budget sent to him by the GOP-controlled legislature underfunds Medicaid and fails to meet the needs of Kentuckians and state government in other ways.

Beshear during a news conference Thursday said he feared Kentuckians would lose health coverage and hospitals could be hurt by what his administration projects will be a $681 million shortfall in Medicaid funding under the budget that lawmakers approved Wednesday evening.

"The numbers don't add up, the math don't math, and sadly what we're going to see is an even bigger loss of health care services and jobs across Kentucky," Beshear said.

His comments echoed warnings from Democrats in the Kentucky House of Representatives during debate on House Bill 500, which allocates more than $31 billion in General Fund revenues over the next two years. The governor said directives passed by the state legislature in previous years have increased Medicaid costs.

The legislature also voted to impose work requirements and copays on Medicaid patients as part of an omnibus Medicaid bill.

An advocate for cancer patients applauded changes made by the Senate to House Bill 2. The Senate lowered the copays to $5 for health care services and $1 for prescription drugs beginning in October 2028. The fees had been higher (at $35, which is the maximum set by the One Big Beautiful Bill Act) and the effective date sooner in the House version than required by the One Big Beautiful Bill Act, which launches Medicaid cost sharing on Oct. 1, 2028.

"In its original form, the bill would have disproportionately penalized cancer patients by jumping the gun on starting Medicaid co-payments and implementing the maximum allowable co-payment of $35 for inpatient hospital care, which is where cancer patients largely receive their lifesaving treatment," said Doug Hogan, American Cancer Society Cancer Action Network government relations director.

Hogan said the bill "has come a long way from what was originally proposed, showing the power of our collective advocacy on behalf of Medicaid enrollees in the commonwealth."

Hogan said his organization "continues to have concerns that copays of any amount and copays across service categories threaten access for cancer patients" but "we appreciate the legislature making adjustments to reduce the biggest barriers in this bill."

House Speaker David Osborne, R-Prospect, told reporters Wednesday evening that House Democrats' concerns on the budget were "political theater" and that lawmakers had met the needs of Kentuckians and made wise investments.

The Kentucky Senate majority caucus said in a news release that the budget recognizes Medicaid "as the fastest-growing area of state spending at an unsustainable level and as a key long-term budget pressure." The release also mentions $290 million in funding for Medicaid benefits, taken from the Insurance Regulatory Trust Fund, that can be tapped if needed by the Beshear administration.

A spokesperson for Senate Republicans said the governor's Medicaid budget is misleading, shifting costs into the future.

Dustin Isaacs, a spokesperson for Senate Republicans, in an email wrote that mechanisms used in Beshear's budget to fund Medicaid delay payments to managed care organizations and use one-time funding that makes Medicaid funding "look balanced" but creates a funding gap in future budgets.

"That's really the concern from our end: this doesn't solve the projected underlying growth in Medicaid; it shifts it and pushes the pressure into the next budget cycle, and I'm not aware of any proposal from the governor to address the fallout from that," Issacs wrote. "However, he won't be in office, so perhaps it's not a long-term concern as long as the two years ahead seem covered."

Issacs also wrote that the legislature's previous directives on Medicaid have been incorporated in the legislature's base funding for Medicaid benefits and don't "explain additional cost growth" of Medicaid. He also said lawmakers are concerned about a "lack of cost control" in state Medicaid, referencing in part fraud allegations against Addiction Recovery Care, the state's largest provider of drug and alcohol treatment.

"No matter what the governor wants to say, at best, his 'full funding' is smoke and mirrors that should not be taken at face value. I believe the legislature's budget operates more honestly, and we continue to hope the governor will come to the table with transparency, explanation and real solutions for the unsustainable growth we are seeing in the program," Issacs wrote.

Beshear also criticized the legislature's budget for failing to put more funding into a state trust fund that builds affordable housing and for not funding an expansion of the state public health laboratory.

He did praise the finalized budget for providing money to pay overtime hours for Kentucky State Police and for out of home care provided by the Kentucky Department for Community Based Services.

The state legislature adjourned Wednesday night for a 10-day period when the governor can choose to sign bills into law, veto bills or allow bills to become law without his signature.

The legislature will reconvene for the final days of this year's regular legislative session April 14 and April 15 to decide whether to override gubernatorial vetoes or send additional legislation to the governor.