State funding for Medicaid could take a big hit this year. A new tax meant to help pay for the program is coming up very short.
State lawmakers created a one-percent tax on health insurance claims to help pay for Medicaid. Originally expected to bring in $300 million dollars this fiscal year, now budget officials say it’ll only generate a little more than half that.
Kurt Weiss, a budget department spokesman, says the state has other ways to come up with some of the money.
“We’ve been trending up a little bit above projection in some of our other tax areas. So, from that standpoint, we should be able to solve it,” he says.
But the state could still lose up to $260 million dollars in federal matching funds, even if officials find a patch.
“If you look at the way the match works, there’s the potential of losing up to $260 million in matching federal funds with this if we’re $130 million short. So, certainly that is part of the concern,” he says.
Weiss says bad projections could be to blame for the shortfall. He says it’s also possibly many health care providers simply aren’t paying up.
“It is a new tax, and it is something new to those that are paying it,” Weiss says. “So we’re really trying to reach out, do that education, and trying to make sure we’re getting the money from everybody we should be getting the money from.”
He says his department is working with other state agencies to pin down the problem.