Douglas says Medicaid reform key to balanced budget

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(Host) Governor Jim Douglas says the projected deficit for the state’s Medicaid program has grown significantly just in the past month. Douglas says it will be essential to reduce the growth rate of the Medicaid program if the state is to achieve a balanced budget in the years ahead.

VPR’s Bob Kinzel reports.

(Kinzel) On the first full day of his new administration, Governor Jim Douglas got some sobering news. The Legislature’s Joint Fiscal Office believes that the cost of maintaining the state’s current Medicaid programs will skyrocket over the next five years.

Last month, the projections predicted a $110 million deficit in these programs in 2007 if no action is taken by the Legislature to change either the benefit levels or eligibility guidelines of the programs. Douglas says the projection has grown again, making it critical for lawmakers to adopt the administration’s Medicaid reform proposals.

(Douglas) “Every time I get a new print out from the Joint Fiscal Office of the Legislature, it projects a bigger deficit in the Medicaid program five fiscal years from now. The latest number I saw was $169 million. So we’ve got to bend the curve. We’ve got to slow the growth of that program or it’s not going to be available to those who really need it.”

(Kinzel) Douglas says he’ll unveil a plan in his upcoming budget address that will call for higher co-payments and deductibles for people in Medicaid’s higher income eligibility groups. Douglas says these proposals could have an important impact on reducing the size of the projected budget deficit.

(Douglas) “It makes a pretty significant difference based on the work that the folks in our Finance Department and Human Services Agency have been doing because of the need to bend the curve. As I mentioned earlier, we’re not going to eliminate a projected $169 million shortfall right away, but we can buy some more time, we can reduce the rate of increase of the program and get us on a more sustainable spending track.”

(Kinzel) Douglas will present the General Assembly with the details of his Medicaid reform plan in a special budget speech to lawmakers in late January.

For Vermont Public Radio, I’m Bob Kinzel in Montpelier.

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