Medicaid deficit rises to $120 million, but causes are unclear

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The Governor announced yesterday that new cuts to the state budget will be necessary due to the rising state deficit. A large part of that deficit is in the Medicaid program, but the causes are unclear. Per person costs in the program are stable, even declining slightly since the switch away from financial risk-bearing organizations – which has saved the state many millions compared to past trends and other states – and likely will continue to deliver savings sustainably into the future. It is unclear how much of the current deficiency is temporary and administrative. OPM’s monthly letter points to higher than expected enrollment (but most of that is still fully reimbursed with federal funds), resolving enrollment category issues, higher than expected hospital settlements, and medication initiative estimates. The letter does not give details on the deficiency causes. Advocates are concerned that potential cuts to program eligibility or provider rates, meant to address the deficiency, will be counter-productive — undermining recent success in the program and reversing CT’s progress toward meaningful coverage for every state resident.