Medicaid facing similar deficit issues

Jan. 11--JACKSON -- David Dzielak, executive director of the Mississippi Division of Medicaid, had a simple response when asked by legislators Tuesday what the contributing factors were leading to the deficit request he is seeking for his agency.

"We're not appropriated the money we asked for," was his simple answer.

The agency, which provides health care for about 760,000 disabled, elderly and poor children and poor pregnant women in Mississippi, is requesting a deficit request of $75.1 million from the 2017 Legislature for the current fiscal year, which ends July 1.

But, as Dzielak pointed out, that is nothing new. Dzielak said he has had to deal with requesting deficit funding from the Legislature all six sessions he has served as Medicaid executive director.

The largest request was $99.5 million during the 2015 session. It has almost become a tradition, going back numerous years, even decades, that the Legislature will underfund the health care agency for the upcoming fiscal year and have to make a deficit appropriation in the midst of the fiscal year during the next session.

During the previous three years, the Division of Medicaid has sough deficit requests totaling $222.3 million. The Legislature has appropriated $194.2 million to fill those budget holes -- close enough to prevent the agency from having to cut services, Dzielak said.

But Dzielak said if a large deficit, such as the $75 million requested this session, is not funded, the agency will be forced to reduce health care services. The reason, Dzielak explained, is that a $75 million deficit in state funds equates to a total deficit of about $300 million since the state pulls down a little less than $3 for every $1 in state funds.

If the deficit is not funded, Dzielak said, "there is no good answer. Any cut we make will affect the provider community (such as doctors, hospitals, nursing homes and pharmacists) as well as our beneficiaries."

Legislators are dealing with tough budget issues because of sluggish revenue collections, but if past actions are an indication, they will find a way to fund much of the Medicaid deficit request.

Dzielak told legislators in a Senate Appropriations subcommittee hearing that if the Patient Protection and Affordable Care Act, better known as Obamacare, is repealed, as is being contemplated by a new U.S. Congress and President-elect Donald Trump, that between 80,000 and 85,000 Mississippians would be removed from the Medicaid rolls.

While Mississippi has not expanded Medicaid as allowed by the ACA to provide health care to essentially the working poor, the federal law did mandate changes in Medicaid eligibility that increased the rolls in Mississippi by about 80,000, Dzielak said.

The ACA-mandated increased enrollment is caused by a number of factors, such as increasing the income levels where people would be eligible for Medicaid. He said, the ACA increased the income level where pregnant women with no other insurance would qualify for Medicaid from 185 percent of the federal poverty level to 194 percent while eligibility for children in families with no insurance increased from 200 percent of the federal poverty level to 209 percent.

Medicaid is one of the biggest expenditures in state government. The Division of Medicaid is requesting $1.03 billion for the upcoming fiscal year, up from the $933 million it was appropriated in the 2016 session. Of course, that appropriation has left the agency requesting a deficit appropriation this session.

During the Appropriations subcommittee hearing, Sen. Brice Wiggins, R-Pascagoula, asked Dzielak and several other agency heads where they would recommend getting the money to fill their needs in a tough budget year. Dzielak responded that it was a tough question, but the job of legislators to answer.

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